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OCTG program negotiations finally kick off

Keywords: Tags  OCTG, oil country tubular goods, Thorsten Schier

NEW YORK — Discussions for longer-term supply of oil country tubular goods (OCTG) have finally started to kick off after buyers waited longer than usual to initiate negotiations this year, market sources told AMM.

"In the last few weeks the RFQs (requests for quotations) have picked up," one supplier source said. "A little bit has to do with (natural gas) prices being up and some of those projects coming around."

"There are some significant programs that are being quoted now," a trader agreed, adding that buyers had likely waited longer because of the price slide seen in the market since early last year. "They placed everything at the beginning of the year and saw prices deteriorate in the second half."

Distributor selling prices for OCTG fell for the 13th consecutive month in April (, April 24).

Competition for business, which typically runs between six and nine months, is said to be tough due to the growing number of players in the domestic market.

"It’s brutal. Numbers are cheap; everybody needs business. Domestics want to lock up tons for the year, and the importers need business," a second trader said.

"Now I’m hearing 15 (bidders on a given project). Last year at this time, it was maybe four or five," the first trader said, noting that some end users are specifying orders be "100-percent returnable or cancellable."

"It’s very interesting to see how the industry is going to deal with this," he said. "Some programs are trying to tell people that without that, they won’t even consider their bid."

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