OCTG Market Update January 2016
Mission Be the industry leader in the supply of OCTG and customized services to the energy industry Vision Be the Premier partner delivering value through innovative supply chain management & customized solutions to optimize total cost of ownership Values Integrity Innovation Expertise Efficient Responsive
US Average Rig Count Baker Hughes
OCTG CONSUMPTION VS DEMAND 2.34 Million 8.0 292,670 Preston Pipe Report
OCTG CONSUMPTION VS DEMAND 8.0 Preston Pipe Report
OCTG MARKET PRICING TREND $2192 $1930 OCTG PRICE PER TON Since January 2012 OCTG = -37.5% 2015 YTD = -30% Trend line average consists of Pipe Logix 7" 29# HCP LT&C & 9-5/8" 53.50# HCP LT&C, OCTG Situation Report 7" 29# S/P LT&C & 7-5/8' 29.70# S/P LT&C, and 9-5/8" 53.50# P-110 LT&C.
Seamless Alloy Casing Price Trend with US Rig Count 2010 - 2015 OCTG PRICE PER TON RIG COUNT
Seamless Alloy OCTG vs WTI Oil
HRC = Preston Pipe Report OCTG & Hot Rolled Coil $879 $2192 OCTG COIL $374 $1369 Trend line average consists of Pipe Logix 7" 29# HCP LT&C & 9-5/8" 53.50# HCP LT&C, OCTG Situation Report 7" 29# S/P LT&C & 7-5/8' 29.70# S/P LT&C, and 9-5/8" 53.50# P-110 LT&C. HRC = Preston Pipe Report
OCTG & #1 Heavy Melt Scrap $1369 $145 HMS #1 = AMM
OCTG & Coke 195 175 $1369 Steelonthenet.com. fob export prices for blast furnace coke shipped from Poland and the Czech Republic in Euros/Metric tonne
OCTG & Iron Ore $135 $1369 Iron Ore Fines Price in USD/MT. InfoMine.com.
Annual Total Consumption
Annual Consumption per Rig per Month 54% Efficiency Gain
OCTG Supply and Consumption 2015 PROJECTION
US TOTAL OCTG INVENTORY ANALYSIS
US RIG COUNT: Story of 4 Cycles -25% 2009 -45% 1986 +36% 1999 -58% 2015
Story of 5 Cycles Numbers from January, not from peak. 1982 Numbers from January, not from peak. 1982 Biggest rig loss at 1727 rigs. 2015 Biggest % loss at 58%. -39% 1986 2015 2009 -25% -45% +36% -58% 1999
US TOTAL OCTG SUPPLY 2009 vs 2015 Positive signs: 1) Total supply single month finally below 2009. 2) Preston estimates Dec Import at 51,000 tons.
2009 vs 2015 Inventory Change Inventory drawn down much faster in 2009 than 2015. Still in excess of 8 months total supply. 1 Million tons excess inventory. Net effective new demand for 2016 is approx 2 million tons.
OCTG Average 2015
OCTG 2015
TOTAL OCTG IMPORTS YTD (thru OCTOBER 2015)
TOTAL OCTG IMPORTS YTD (thru OCTOBER 2015) -65%
Tonnage Delta 2015 vs 2014 (Thru October)