Considering that plates runneth over for many in the market this month trying to get kids back to (remote) schooling, sourcing toilet paper and prepping for the busy planning season we’ll waste no time getting down to business. Next month it will be full speed ahead when we publish the results of our exclusive Q3 OCTG Inventory Yard Survey and fill in the blanks on a number of critical metrics that illuminate the driving forces underpinning the current market.
Our channel checks this month yielded some insight into the import situation with expectations of increasingly muted shipments into the year-end. We discuss our thoughts on the bifurcation of domestic and imported shipments in this month’s intel.
The unprecedented degree to which OCTG shipments, both domestic and imported, have been pared, while painful, is a constructive strategy in a challenging time like this. The fact that great restraint has been exercised in inventory builds thus far will be helpful in the long run, too. These events don’t make surviving downturns easier but they do go a long way to facilitate the inevitable recovery. And once a few definitive demand catalysts arrive, domestic tubular producers will have a narrow window of opportunity to strike while the iron is hot and build market share before the supply dogfight ensues again.
We began to see this confluence of events factor into OCTG pricing last month. And this month that cycle is even more pronounced. Details can be found in our September monthly Report.
Times are tough, we can’t deny that. But we can offer some consolation in closing with quotes that have served to help humankind during these periods. In the face of uncertainty, agility is key and Charles Darwin’s words on agility have stood the test of time, “It is not the strongest of the species that survives, nor the most intelligent. It is the one that is the most adaptable to change.” Here’s to change for the better in the days to come.
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Photo Cimarex Energy Courtesy ©Jim Blecha: oiladngasphotographers.com