When it comes to OCTG inventory, it’s commonly accepted that The OCTG Situation Report is in a league of its own. And every April we swing into action to report the results for the first quarter of our exclusive OCTG inventory survey. As most of you know, we cover all of the bases when it comes to collecting inventory counts throughout the entire supply chain. To ensure the most accurate results we involve a team of people who count pipe at truck terminals, mills, processors and inspection yards across the lower 48. The good news this quarter: no curveballs.
Right off the bat we can tell you the results could be worse. It’s safe to say the run up in inventory stockpiles is not as high as it might be given the glut of imports over the last year. You’ll find complete details in the charts, tables and commentary in our April Report.
As we’ve stated in the past, pipe moves in one of two directions: downhole or uphill. The latest stats indicate that downhole is in the lead. While this news is encouraging it doesn’t mean anyone can take their eye off the ball. The final determinations in the OCTG trade case won’t be revealed until early July and the ITC vote follows in late August. As baseball legend Yogi Berra said: “it ain’t over ’til it’s over.” Until then, domestic production cuts and mill closures will loom large: consequential effects of the unrelenting import situation and growing domestic capacity.
As we wind up our coverage of the first quarter of 2014 we’re reminded of the paradox that exists currently in the oil patch. Caught between the push and pull of supply versus demand the outcome is really anyone’s game.