As a result of significant drops in global raw material costs, import J55 electric resistance welded (ERW) oil country tubular goods (OCTG) casing prices have dropped substantially, and further declines appear to be looming on the horizon. Buying activity has slowed in the last week as Korean prices in the US have declined about $2.00 cwt. ($44/mt or $40/nt) since last week to $53.00-$54.00 cwt. ($1,168-$1,190/mt or $1,060-$1,080/nt) DDP loaded truck in US Gulf ports. Korean pipe prices for the US have not fallen as substantially as iron ore prices or declines in the Korean domestic flat rolled market; and as a result, buyers anticipate that Korean OCTG casing prices for the US have more room to fall and are therefore holding off purchases for the time being.
The drop in Korean prices has also resulted in a decline in Vietnamese prices as well. Vietnamese prices are now about $52.00-$53.00 cwt. ($1,146-$1,168/mt or $1,040-$1,060/nt) DDP loaded truck in US Gulf ports, also down $2.00 cwt. since last week. Although Vietnamese prices are the most currently the competitive in the US import market in terms of prices, interest in imported Vietnamese pipe has waned in the last couple weeks; sources tell SteelOrbis that there has been some concern about Vietnamese OCTG as of late, in part due to Vietnamese mills keeping offer prices to the US just below Korean prices in addition to rumblings of a possible relationship between Vietnamese pipe and Chinese OCTG, which is currently under anti-dumping legislation.
In the US domestic market, there continues to be pressure on welded pipe prices due to major drops in domestic HRC spot prices in the last couple weeks. Even so, domestic J55 OCTG casing spot prices are still about $66.00-$67.00 cwt. ($1,455-$1,477/mt or $1,320-$1,340/nt) ex-Midwest mill, but any order of sizeable tonnage is being placed closer to, or just under, $65.00 cwt. ($1,433/mt or $1,300/nt) ex-mill. For the most part, mills are focusing little attention on the spot market as program business is keeping most domestic producers busy enough that few are inclined to strike any major deals on a small spot order.