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18 January 2010
Continued upward movement in Chinese steel prices throughout December and early January pushed substrate costs higher, with seamless pipe producers and traders at first reluctant to pass on these higher costs due to excess inventories. However, from early January onwards seamless prices made gains.
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18 January 2010
European tube and pipe mills are facing large increases in their input costs while, at the same time, finished pipe prices remain relatively stagnant. MBR has noticed some increases in offer prices within the last two weeks or so: the CIS mills have generally raised their export prices by $15-25/tonne. But otherwise, mills in western Europe have not made any major change to their prices.
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18 January 2010
There has been little change in seamless OCTG prices in the US in the last month. However, with welded OCTG prices expected to move up on the sharp $100/ton increase in coil prices in the last six weeks, seamless mills are under less competitive pricing pressure. We believe that prices will move up gradually in the first half of 2010, along with a slight extension in order levels as inventory continues to be worked through and rig numbers improve with the expectation that drilling rates will move higher through the first half of the year on the back of higher oil and gas prices.
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18 January 2010
Provided economic recovery continues in the developed economies and nothing interferes with Chinese growth, there seems scope for crude oil prices to remain firm. MBR understands that OPEC believes the US economy is sensitive to an oil price above about $80/bbl. If prices climb above this level for a prolonged period we expect to see OPEC relax its policy on production, which should ease price inflation. Natural gas prices will remain subdued, however, which should put a hold on gas drilling in the USA.