NEW YORK Imports of oil
country tubular goods (OCTG) and line pipe fell sharply in
February compared with the previous month, although
sources say the drop was not enough to keep up with tepid
OCTG imports totaled 176,299
tonnes in February, 34.4 percent lower than Januarys
268,593 tonnes and the second-lowest level recorded in the past
13 months, according to preliminary data released by the U.S.
"Im not shocked at all
(that imports dropped). I thought they should have dropped a
long time ago. Sales are terrible," one trader said.
A second trader echoed that
sentiment, pointing to stagnant demand for the commodity-grade
products that make up the majority of imports.
"Theres just too much
inventory; 700 to 800 rigs are still using what the Koreans are
shipping," he said.
Shipments of OCTG from South
Korea totaled 52,865 tonnes last month, down from record levels
of 97,785 tonnes recorded in January and bucking market
speculation that imports from Korea would increase as producers
try to land material before the possible filing of a
long-awaited trade case (
amm.com, Feb. 12).
"These guys dont want to
be wrong. If they are, theyre not going to be able to
file another case for a very long time," the trader said of
domestic producers apparent hesitation to file a
OCTG imports from Vietnam,
rumored to also be in domestic producers sights for a
potential trade case, fell significantly to 4,294 tonnes in
February from 16,359 tonnes in January.
Drill rigs in the United States
totaled 1,746 in Baker Hughes Inc.s latest count, down 30
from the week prior and 11.6 percent below the 1,968 recorded
at the same time last year.
Sources showed little surprise
at the dig-count drop, even as natural gas prices have risen to
more than $4 per million British thermal units (mmBtu).
"Thats not enough. For
real drilling to start, we need $6. For existing wells (to
restart), its $5," he said.
Line pipe imports also fell
sharply in February to 179,777 tonnes, 18.8 percent lower than
the 221,303 tonnes shipped in January, with Koreas
figures showing a 35.9-percent dip to 50,878 tonnes.
Indias shipments, on the
other hand, jumped sharply to 22,344 tonnes in February from
2,923 tonnes the prior month, while shipments from the United
Kingdom dropped to just 295 tonnes from 27,848 tonnes in the
"Im hopeful on line pipe
more so than on OCTG," the first trader said, citing the number
of pipelines being planned primarily as a result of increasing
oil production in the Bakken Shale.
Standard pipe imports were relatively steady month over
month at 62,422 tonnes vs. 64,572 tonnes in January, while
structural pipe and tube imports were largely flat at 32,535
tonnes vs. 30,796 tonnes previously. Imports of mechanical
tubing dropped to 34,935 tonnes in February, down 26 percent
from 47,241 tonnes in January.