Getting a Read on OCTG Inventories for 2Q17

SeAH Steel America July Cover Blog

Photo Courtesy SeAH Steel America

Susan Murphy | Publisher of The OCTG Situation Report

Susan Murphy Publisher

As we close the chapter on another exclusive quarterly inventory survey, we’re grateful to the hundreds of OCTG yards throughout the supply chain that enable us to get the inside story on inventory volumes across the lower 48. We’ll preface this by saying last quarter’s reveal—exposing the first build in inventories since March of 2015—was a bit of a cliffhanger. Not surprisingly inventories and the suspense continued to build in Q2. As OCTG inventory is a leading barometer of oil patch health, what follows is our read on the situation.

Setting the tone for the action-packed second quarter, “prime” U.S. OCTG inventories escalated again for the period ending 6/30/17. The bulk of the increases were reported in the mill/processor category and West Texas/Permian region of the “Tri-state” (TX, OK, LA) area. OCTG stockpiles outside the tri-state region also advanced in Q2. The build recorded in the outer states Q/Q was attributed mostly to increased levels of activity in the New Mexico/Delaware Basin and Colorado/DJ Basin.

Robust production throughout the past quarter gave rise to increases throughout every product segment except one in the tri-state region. Our separate survey of select OCTG distributors registered inventory appreciations as well, an expected outcome considering demand levels. Further detail along with an analysis of “active” versus stalled and/or obsolete OCTG inventory is presented in this month’s OCTG Situation Report.

While raw inventory levels are mounting to support higher sales volumes and hedge against potentially rising costs, months of supply occupies a relatively safe place. There’s nothing inherently wrong with higher levels of inventory provided demand holds steady. That, of course, remains the $64,000 question.

There’s a lot of hesitation in the market with the imminent 232 ruling hanging overhead. OCTG is being quoted subject to the results of the investigation. Oil price uncertainty, OFS cost increases, budget fatigue and the expiration of hedges compound the uneasiness.

If only interpreting inventory results was as simple as reading the Texas Tea leaves! In reality, it’s a lot more complicated but the value is critical insight into the cycles of the OCTG supply chain. Fortunately, there weren’t many surprises this past quarter. While this does not guarantee a happy ending to the year at least it doesn’t conclude the growth narrative that commenced in the second half of 2016.

Photo Courtesy SeAH Steel America

Posted in Department of Commerce, ERW Pipe, Hot Rolled Coil, HRC, Inventory, OCTG, OCTG Consumption, OCTG Consumption & Pricing, OCTG domestic shipments, OCTG Exports, OCTG Imports, OCTG inventories, OCTG Inventory Survey, OCTG mill, OCTG Mills, OCTG Pricing, OCTG Processors, OCTG Producers, OCTG Trade Case, Oil & Gas Industry, Oil Country Tublular Goods, Oil Patch, Oil Services & Equipment, Onshore, Prime Pipe, Q2, Seamless Pipe, Section 232, Steel Trade Case | Tagged , , , , , , , , , , , , , , | Leave a comment

fOiled Again: Section 232’s Catch-22 for OCTG

Photo Courtesy WPX Energy, © Jim Blecha, www.oilandgasphotographers.com

Photo Courtesy WPX Energy, © Jim Blecha, http://www.oilandgasphotographers.com

Susan Murphy | Publisher of The OCTG Situation Report

Susan Murphy | Publisher

Every June we take the temperature of the oil patch and judging by the tone of our many conversations this month we’d say, without exception, full ‘June’ fever has taken hold in the form of the Section 232 (aka Section ‘Catch-22’) investigation. While the probe is occupying more bandwidth than we have space, we’re going to try and break down the parts most likely to affect OCTG into bite-sized pieces. There are two reasons why OCTG is expected to be impacted by the 232: 1) OCTG imports currently account for 60% of the market YTD despite multiple expensive and time-consuming new trade cases and 2) OCTG is at “the top of the food chain” when ranking steel products in terms of profitability. That said, with the scope yet to be defined it’s too early to make predictions.

First some context: the 232 initiated on April 20, 2017 is a rare investigation into national security (broadly defined as economic and energy security) implications of steel imports. A 270-day timeline (or January 14, 2018) to deliver findings and recommendations to the president is allowed by law but this study has been hyper-expedited and while follow-up briefings were scheduled for last week they were cancelled due to lack of consensus on the approach. If the Commerce Department finds that imports threaten to impair the national security, the president has up to 90 days (or September 15, 2017) to determine whether to use his statutory authority to “adjust imports” and another 15 days (or September 30, 2017) to implement his course of action though many expect an earlier announcement. The authority of the president is broad, but it is not unlimited. No president before Trump has determined that retroactive import restriction must be taken to protect national security so imposing relief on imports that have already entered the country seems unlikely. Thus the worst case, from an import perspective, is that ships that are more than 15 days from US shores when the decision is made may be affected. Of course this assumes congress concurs with his decision and it won’t encounter legal challenges, or unilateral retaliations by aggrieved trading partners or even market turmoil—all decided possibilities.

While various remedies are available, there are three more likely recommendations that the Commerce Department could make: 1) imposing tariffs above and beyond the countervailing duty (CVD) and antidumping (AD) ones already in place, 2) imposing quotas or 3) a hybrid of sorts, a “tariff-rate quota.” The tariff-rate quota option includes quotas on specific products from specific countries with new tariffs for imports above those levels. Secretary Ross has suggested this option would help mitigate price risk for steel consumers. Considering the ramifications of any outcome, interests of both steelmakers and steel consumers need to be throughly considered.

Domestic mills tend to favor tariffs or tariff-rate quotas (to equalize the values/selling prices between domestics and imports) whereas E&Ps are inclined to prefer quotas. Since there is no perfect answer and no clear cut winner in these cases, the “tariff-rate quota” may be the best choice. For operators in the oil patch, the #1 concern is that favor shown toward domestic producers will force prices higher. Simply put, there will have to be some give and take for all concerned and that is as it should be. The fact is, we’re all in this together and some form of an economically viable domestic OCTG industry is a critical part of the whole if E&Ps are to operate as well-oiled machines.

Section 232 also has the potential to send the cost differential between domestic and international HRC soaring. In this way the ruling needs to take into consideration not only steel imports but pipe imports, too. Likewise, it could trigger false hope among domestic OCTG suppliers that might expand supply only to have the ruling overturned without long-term market dynamics to support their operations. In any event, more severe import restrictions will force seamless and welded producers alike to buttress their operations in order to defray the costs of taking up for products that they have no financial incentive to produce. These issues will undoubtedly weigh on the market and the potential for some fallout in 2H17 exists. As we mark the halfway point of an otherwise gratifying year, the sobering Section 232 debate swirling in our midst reminds us that navigating through the first six months was half the battle.

Photo WPX Energy Courtesy © Jim Blecha, www.oilandgasphotographers.com

Posted in 2017 E&P Budgets, OCTG, OCTG Consumption & Pricing, OCTG Forecast 2017, OCTG Imports, OCTG inventories, OCTG Mills, OCTG Pricing, OCTG Processors, OCTG Producers, OCTG Spot Prices, OCTG Trade Case, Oil & Gas Industry, Oil Patch, Oil Prices, Prime Pipe, Seamless Pipe, Section 232, steel industry, Tubular Goods, upstream OCTG | Tagged , , , , , , , , , , , , , , , | Leave a comment

OCTG ‘Crude’ for Thought 

Forest Oil Corporation, Granite Wash. Lantern Rig 14 on the Edwards 1-22H.

  Photo Marubeni-Itochu Tubulars America Inc.
Courtesy ©Jim Blecha: oiladngasphotographers.com.

Susan Murphy | Publisher of The OCTG Situation Report

Susan Murphy | Publisher

As May is historically a light news month and the first four months of this year have been unusually  weighty, we thought it might be prudent to review just how far the OCTG sector has come over the past year. Last year at this time the buzz in the oil patch revolved around “lower for longer.” This year the question is, how much higher and how much longer when it comes to a host of metrics, rig counts and pricing among them? Those are topics we’ll analyze next month in our 2H17 outlook.

No surprise: leading the charge is oil, the price of which has risen 21% over the past 12 months carrying all other related metrics along for the ride. The 80% surge in the US rig count has surpassed even the most bullish of forecasts despite range-bound WTI prices. This, of course, presents a catch-22: the rebound in the rig count and consequent ramp in US onshore production can come with a price tag that trickles down to OCTG. Weighing on oil’s fragile state are questions about OPEC’s direction for production quotas and their ability to adhere to them if agreed upon when members gather for their meeting on May 23.

While demand has driven OCTG prices north, most of the more significant gains we’re tracking owe their newfound vigor to the market tightness we’ve reported over the last couple months. OCTG raw materials have been in a state of flux of late, too, a fact that can’t be ignored when considering how this year may play out and not just for OCTG. U.S. HRC, which is ~$600/st (down from its Jan 2 high) is drifting lower given the recent free fall in iron ore prices. Since iron ore is integral to the steel making process, this crash has wide-ranging implications. Forecasters have predicted that iron ore, currently USD ~$60/st, will continue its decline, perhaps as much as ~20% over the course of the year. At the same time U.S. domestic scrap prices, which have buttressed domestic HRC prices, are also under pressure. The crackdown on illegal induction furnace capacity in China (the largest consumer of domestic Chinese scrap) prompted the country to jump on the scrap export wagon, a move that could depress US domestic scrap and HRC prices. What does this mean for OCTG? It means that OCTG producers who source third party raw materials will have an opportunity to recoup some of the heavy losses sustained over the past two years. And the fact is, domestic mills are now bearing the added costs of ramping up and need to do this to continue to serve a growing energy market.

All this brings us back to China, the world’s No. 2 economy and the epicenter of the demand debate for all things energy related. Most analysts will tell you that the crash in the commodity markets that commenced in mid-2014 was driven by the slowdown in the Chinese economy. While there have been reports that the Chinese economy will see accelerating GDP growth over the next couple of years many analysts aren’t buying it. And if the Chinese aren’t “buying it,” whatever “it” may be, its stability is likely to be challenged. These are the underpinnings of the concerns we have when we consider the fate of crude prices and ultimately OCTG for 2H17.

Meanwhile domestic and imported OCTG shipments are escalating at an intense velocity as everyone is eager to capitalize on this welcome window of growth. With inventories building as of 1Q17, even slightly, no one is immune to a correction in the oil markets. Every member of this tight knit community wants to be optimistic but there’s too much at stake to throw caution to the wind just yet.

As we contemplate what the balance of the year might bring, we can’t help but ruminate on the words of Charles Darwin who said, “It is not the strongest of the species that survives, nor the most intelligent. It is the one most responsive to change.” And that remains our takeaway—come what May.

Photo Marubeni-Itochu Tubulars America Inc.
Courtesy ©Jim Blecha: oiladngasphotographers.com

 

Posted in E&P, E&P spending, Energy, ERW Pipe, Hot Rolled Coil, HRC, Inventory, OCTG, OCTG Consumption & Pricing, OCTG domestic shipments, OCTG Exports, OCTG Imports, OCTG inventories, OCTG Mills, OCTG Pricing, OCTG Spot Prices, Oil & Gas Industry, Oil Country Tublular Goods, Oil Patch, Oil Services & Equipment, Prime Pipe, Seamless Pipe | Tagged , , , , , , , | Leave a comment

Following The 1Q17 OCTG Inventory Audit Trail

TSC Almeda two stacks crop-2smart-fix

Photo Courtesy Texas Steel Conversion

Susan Murphy | Publisher of The OCTG Situation Report

Susan Murphy Publisher

It’s that taxing time of year when readers of The OCTG Situation Report count on us to roll up our sleeves and crunch the numbers in preparation for our exclusive Inventory Quarterly. Our analysis, derived from our yard survey of the U.S. OCTG supply chain, is essential in bringing a high degree of certainty to an otherwise elusive inventory metric—a claim no other publication can make. And with that we commence our audit of first quarter inventories.

Inventories of “prime” U.S. OCTG moved up slightly in Q1. The bulk of the build in “tri-state” (TX, OK, LA) OCTG inventories was reported in the West Texas/Permian basin. The increase in tons from outside of the tri-state region Q/Q was attributed mostly to elevated levels of activity in the New Mexico/Delaware Basin and Niobrara shale plays.

Surging activity brought a mixed bag of increases and decreases throughout every product segment across the tri-state region this quarter. The most significant of the changes correlated with the areas of greatest supply tightness as well as new supply again this quarter. The gains posted in our separate survey of select OCTG distributors demonstrated a decided vote of confidence for the oil patch from this group. Complete details about first quarter inventories and all the OCTG metrics that matter is provided in the April OCTG Situation Report.

While the increase in inventory wasn’t of grave concern, it’s new trajectory gives us pause. We can’t help but be somewhat uneasy when monitoring import volumes of late especially considering the additional capacity that is coming online domestically. Since November 2016, imported tons have continued their upward march with the import-a-palooza showing no sign of attrition. The recent results of the administrative review of anti-dumping (AD) duties on imports of OCTG from South Korea for the period 7/18/14 – 8/31/15 concluded that prices of the hot-rolled coil used to produce OCTG as well as Korean electricity prices were distorted. The highest duties were determined for Nexteel. SeAH was assigned a token duty while “all others” will pay a slightly stiffer penalty. The nominal increase in duties that was determined for all but Nexteel suggest that it is business as usual for the rest of the South Korean exporters who will likely push through healthy increases in exports this year. Until then expect that pipe supplies will remain strained and prices will continue in a state of flux.

Returning to inventory, we’ve been tracking and reporting on “active” versus stalled and/or obsolete OCTG inventory since our first deep dive into this weighty subject last year in June. At this point in time our analysis has determined a fairly significant portion of current inventory is made up of stalled or “homeless” materials defined as uneconomically expedient pipe, premium/semi-premium threaded and “exotic” onshore OCTG. Another portion is made up of offshore materials that have been benched for the time being. Obsolete items account for the balance. Also, we remind readers that new OCTG sells before old, which further bedevils inventory concerns.

Bottom line: while it’s tempting to get swept up in the momentum of the moment, the upswing in inventories— however slight—reminds us that a degree of caution must still be exercised. Visibility into oil markets for 2H17 is limited and any disruption could easily tip the ‘shales’ out of our favor.

Posted in Department of Commerce, E&P, E&P spending, ERW Pipe, First Quarter, Hot Rolled Coil, HRC, Inventory, OCTG, OCTG Exports, OCTG Imports, OCTG Inventory Survey, OCTG Mills, OCTG Pricing, OCTG Processors, OCTG Producers, OCTG Spot Prices, Oil & Gas Industry, Oil Country Tublular Goods, Oil Patch, Permian Basin, Q1, Seamless Pipe, Shale, Shale Plays, steel industry, Steel Trade Case, Tubular Goods, U.S. HRC Spot Price, upstream OCTG | Tagged , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

2017 U.S. OCTG Mill Supply Forecast: The Million ‘Tubes’ March

voestalpine Tubulars: Seamless Tubular Products

Photo Courtesy voestalpine Tubulars

Susan Murphy | Publisher of The OCTG Situation Report

Susan Murphy | Publisher

The quote, “Prediction is very hard, especially about the future” captures the essence of the responses we received to our request for domestic OCTG mills supply forecasts in a year where uncertainty seems to be the only certainty. Thus, we braved this muddy matter with the hope of rising above the perils of prediction.

Our U.S. OCTG Mill Supply Forecast comes with the following set of assumptions for 2017: a) WTI averages $50 – $60/BBL; averages over or under this range will necessitate adjustments to the supply forecast and b) South Korea receives only a token increase in duties in the first OCTG anti-dumping (AD) administrative review scheduled for March 30 (with the possibility of an extension to April 12). We expand on this subject later in our editorial.

Our forecast reveals both domestic and foreign mills have the pedal to the metal potentially unleashing 112% more OCTG into the market in 2017 than 2016. The production of domestic seamless OCTG is expected to outpace that of welded, a trend that began in 2016 as the downturn lingered, HRC costs spiraled upward and mills struggled to stay busy. As the market continues to improve, the delta between ERW and seamless costs will widen making welded OCTG competitive for some of the more efficient mills and ERW’s market share will revert to more traditional levels. While seamless OCTG also occupies a greater piece of the import pie, we’ve increased the percent of welded imports Y/Y in the belief that South Korea will hike their shipments to levels closer to that of 2015 if the administrative review is decided in their favor.

Insofar as the final duties in the South Korean AD case are concerned, we’ve vetted every possible scenario only to arrive at an impasse. There’s the possibility that Trump’s team of protectionists including steel advocate, Secretary of Commerce, Wilbur Ross, could rule in favor of a more aggressive stance against South Korea. There’s also the case for the knock-on effect of the tariffs the Department of Commerce assigned to Korean steel producers in the HRC case, which exercises new powers granted under the Trade Preferences Extension Act of 2015 making it easier for industries to demonstrate injury. In this way, Korean OCTG producers are at greater risk for allegedly relying on Korean-produced HRC as well as dumped Chinese HRC to manufacture OCTG at export prices that arguably constitute dumping. Coupling this with the news that the Trump team is exploring alternatives to taking trade disputes to the World Trade Organization makes this case a “slam dunk” for some speculators.

But before anyone drops the mic and pops the cork there’s another side to the story and one that merits serious consideration especially as it applies to our relationship with our ally South Korea: geopolitical unrest. The fragile state of political affairs in both North and South Korea could outweigh the domestic steel industry interests in the near term, resulting in a nominal increase in duties for this first review. While there are strong arguments for either outcome, the recent announcement from U.S. Secretary of State Rex Tillerson that “the threat of North Korea is imminent,” puts us in the latter camp until further notice.

Meanwhile, this fickle situation is having a decided impact on the state of U.S. OCTG. To say that OCTG is in a “tight spot” is to put it mildly. Mills are under the gun to produce, expected to ramp up from near zero to sixty. Distributors are leaving no stone unturned in their search to find high demand products or offer substitutes. Korean importers and producers are in limbo, unsure whether to ship out or abandon ship. Operators are left feeling the heat as OCTG pricing stages a brisk recovery with mill price increase announcements coming fast and furious. If drilling activity continues unfettered, mills are expected to catch up with demand sometime in August. The question is: can this level of activity be sustained throughout the year? We all know when pipe isn’t moving downhole things go downhill and no one is eager for those days to return.

With OPEC determining a course for their May meeting, oil markets getting spooked and the specter of cost inflation looming, the tubular market hangs in the balance suggesting another test of our industry’s ‘metal’ may be on the horizon. So, what’s a pipe ninja to do? Unpredictable times call for unconventional wisdom: a reminder that reality is rarely ‘oil’ or nothing.

Photo Courtesy voestalpine Tubulars

Posted in E&P, Energy, ERW Pipe, OCTG, OCTG Consumption, OCTG domestic shipments, OCTG Imports, OCTG Mills, OCTG Trade Case, oil country tubular goods, Oil Patch, Oil Services & Equipment, Onshore, Seamless Pipe | Tagged , , , , , , , , , , , , , , , , | 2 Comments

OCTG: “Days of Future Past”

pipeco-bw-pipe-2-150-dpi

Photo Courtesy B&L Pipeco Services

Susan Murphy | Publisher of The OCTG Situation Report

Susan Murphy | Publisher

In the words of baseball legend Yogi Berra, “the future ain’t what it used to be.” As we embark on our publication’s  31st annual ‘state of the industry’ address, we find this quote to be more fitting than ever and not necessarily limited to OCTG. But OCTG is our focus here so let’s see if we can determine what the immediate future holds and its relationship to the metrics that defined the past year in OCTG.

The year-end OCTG stats in our table on page 6 of the February Report offer a bird’s-eye view of the trends that defined the OCTG landscape over the past three years. While the bulk of 2016 OCTG tonnages are less than those posted for 2015, there are two exceptions that foretell of things to come. The consumption per rig metric increased again in 2016, a nod to continued advancements in drilling technology and improvements in efficiencies. Also on display in our table are the decided gains made in market share for domestic seamless products last year. This development speaks to the opportunities that await seamless OCTG producers in the year ahead.

If we could drill down to a single word that sums up the current moment it might be “erratic.” In no particular order, we have: extreme shortages in tubing and surface casing; mills racing to ramp up production and closing in on capacity; congestion at Port Houston causing import cargo bottlenecks; a delay in the Korean OCTG tariff ruling/administrative review; an iron ore price spike; talk of another round of OCTG mill price increase announcements and speculation on what 2H17 looks like. Yes, there’s a lot to digest.

Our Inventory to Mill Sales stats of late are indicative of the vastly improved sentiment that has permeated (‘Permian-ated!’) the oil patch. In the simplest terms, the inventory to mill sales ratio metric measures the amount of inventory compared with the number of sales. The spike in this ratio seen in March and April of 2016 denotes the lowest point in OCTG consumption since mid 2009. This metric will become increasingly important in the days to come as OCTG mills scale up and imports rise to meet demand.

Herein lies the potential pitfall of sharp supply responses both domestic and imported. As the U.S. rig count rises and demand for OCTG escalates, mills across the globe are understandably eager to get things rolling. If concerns about an overextended U.S. recovery ensue and oil markets suddenly sour, that inventory build restarts the cycle seen in the U.S. OCTG Inventory to Mill Sales Ratio chart as of February 2015 when OCTG consumption began to tumble and prices started to languish. This prospect reinforces the need to keep supply chains under control until there’s more visibility into the second half of 2017.

The delicate balance that exists in the oil patch this year will surely keep us on the edge of our seats. Until the OCTG whisperer reveals what 2017 holds there’s one thing of which we can all be certain as stated by another baseball great Dan Quisenberry who said, “I’ve seen the future and it is very much like the present, only longer.”

Photo Courtesy B&L Pipeco Services

Posted in OCTG | Leave a comment

OCTG 4Q16 Inventory: Is the Yard Half Empty or Half Full?

port-of-houston-authority

Photo Courtesy Port of Houston Authority

Susan Murphy | Publisher of The OCTG Situation Report

Susan Murphy | Publisher

The past 26 months in the oil patch have run our industry through the mill, so the glimmer of light we see at the end of the tunnel sets the tone for a decidedly happier new year. Each January (and every quarter) we go to great lengths to determine if the ‘yard’ is half full or half empty. Our analysis is based on our exclusive quarterly inventory yard survey, designed to gauge demand for OCTG in the U.S. The results of our survey are measured by the yard, specifically: truck terminals, mills, processors and inspection yards across the lower 48 and by all indications this quarter’s outcome puts OCTG on firmer footing.

In Q4 inventories of “prime” U.S. OCTG decreased by a healthy percentage. Tonnage declines were reported in every product segment in Q4 in keeping with surging activity across the tri-state region. Interestingly, many of the more significant changes noted correlated with our recent distributor survey pinpointing areas of supply tightness. Our separate survey of select OCTG distributors reinforced this collective’s growing confidence even as they strategically hedge against rising material costs. Another positive sign seen again this quarter is the uptick in threaded and coupled tonnages (versus plain end) as a percent of tri-state inventory tonnages.

So far so good, so let’s continue with the encouraging 2017 E&P spends. According to Evercore ISI, North American capex should rally ~35% with the U.S. spearheading the recovery and Canada trailing with a modest 10% upswing. It’s important to issue the caveat that only a small percentage of operators have announced their budgets. The bulk of their outlooks are expected during their 4Q16 earnings calls. The new administration’s anticipated policies (regulatory reform, infrastructure spend & protectionism among them) are likewise considered bullish for OCTG.

While numerous catalysts hover, we would be remiss if we didn’t give equal time to potential pitfalls. Just because we can see the forest for the trees doesn’t mean we’re out of the woods. 2017 could bring any number of political or economic black swans including the possibility that OPEC might reverse course. Any of these scenarios can trickle down to OCTG and are reminders that it remains prudent to keep a short supply chain in times of uncertainty.

After two years of relentless cost-cutting there’s also the looming probability of added OFS cost increases. On that note, we’re ever mindful of the heightened resilience of raw material costs and how they’re impacting the tubular market. U.S. scrap prices have risen 46% since September 2016, +50% Y/Y. During this same period hot rolled coil costs increased 23%, +58% Y/Y. It’s almost as if coil is suddenly “the new black.” With its numerous uses and applications many of which are in high demand, the energy market is a shrinking piece of the pie. Trade cases against HRC have been successful in diminishing imports and tightening domestic versus international spreads: a welcome relief for domestic manufacturers who are seeking to recoup margins. These raw material costs, which are being passed onto OCTG mills that are increasingly limited to domestic suppliers, began showing up in our pricing surveys last month and have continued into January.

OCTG prices are also being buoyed by supply tightness that is showing up in most every region throughout the prevailing shale plays. This dearth is expected to continue through 1Q17 as domestic suppliers scramble to meet emerging demand and until imports reach our shores.

This leads us back to OCTG inventory where we’ve been tracking stalled (defined as no current demand and/or items unused for more than a year) and obsolete tubular goods. We first reported on our inventory tonnage analysis in June of 2016 and updated it in October for Q3. Complete details about this situation, OCTG supply tightness and our inventory results are provided in this month’s OCTG Situation Report. Continuing in a positive vein, months of supply for the action-packed fourth quarter showed a marked improvement and a metric not seen since early 2015. Thus, by our analytics we see the ‘yard’ as half full – suggesting that inventories are stacked in our favor, at least through 1H17.

Posted in 2017 E&P Budgets, E&P, E&P spending, Energy, Hot Rolled Coil, HRC, Inventory, OCTG, OCTG CAPEX, OCTG Imports, OCTG inventories, OCTG Inventory Survey, OCTG Mills, OCTG Pricing, OCTG Processors, OCTG Producers, Oil & Gas Industry, Oil Country Tublular Goods, Oil Patch, Oil Services & Equipment, Onshore, Q4, Tubular Goods, upstream OCTG | Tagged , , , , , , , , , , , , , , , , , | Leave a comment