November 22, 2008

OCTG prices have increased by 80% in 2008

Purchasing.com reported that steel pipe distributors and oil industry buyers are facing continued higher prices this month for oil country tubular goods. Overall, OCTG grade tubing costs 80% more now than in December 2007.

According to buyers, purchases of down hole seamless tubing transaction sales opened July at USD 2,640 per ton up from about USD 2,100 in June. This is close to the USD 2,654 per tonne mill price being reported by Pipe Logix, the market research firm that tracks the OCTG market.

US Steel and other OCTG producers actually announced higher posted prices by USD 550 this month in light of increasing raw material, energy and transportation costs. This is on top of a USD 250 per ton surcharge that US Steel and other mills implemented in May.

Mr Kurt Minnich manager of the Santa Fesaid that spot prices for seamless and electric-resistance welded tubing and casing already have been under upward pressure from an earlier series of mill price hike announcements and sales now being made in the Oil Patch at price in effect at delivery terms. That’s a marketplace issue because delivery lead times for both foreign and domestic mills are four to five months out.

The American Metal Market newspaper is quoting pipe and tube distributors as saying that oil drilling activity is so active that further price hikes are possible this summer, much to the dismay of the service centers and the drilling rig operators.

(Sourced from Purchasing.com)