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  • Writer's pictureSusan Murphy

Orbiting The OCTG Space: Inventories Down Amidst A Cluster of Conditions

The OCTG Situation Report® April 2024 Photo Courtesy JD Rush Corporation
Photo Courtesy JD Rush Corporation

Greetings earthlings! We hope all remains well in your galaxies. It’s been quite a cosmic start to the year you might say, what with two eclipses and a bunch of planetary retrogrades, not to mention four forthcoming super full moons that will hover like big pizza pies in the sky. When many in the US were bathed in the “path of totality” earlier this month, we were firmly situated at Mission Control staring directly into our desktops while analyzing the results of our exclusive quarterly yard inventory survey in the OCTG space.

Q1 also revealed mills and processor’s combined L48 inventories increased, while stocks found in L48 inspection yards contracted by a healthy volume. Details behind both the build and contraction can be found in our April Report. Additionally, our survey produced a mixed bag of results in every product category (both SMLS & ERW) in the tri-state (TX, OK, LA) this past quarter. Tubing stocks continued their fall, but there’s still plenty of room for improvement in this metric.

So, how does our 1Q24 inventory survey stack up alongside market sentiment? Similarly, actually, almost as if the stars are in alignment only in a strange, nebulous way. Most market participants agree the OCTG trade is operating in ‘slo-mo’: one slow-month after another. The expression, “watchful waiting” may best sum it up. It’s an upside down, decoupled mashup of high oil prices and low oilfield activity.

OCTG prices seem to be caught up in this sideways market, too. We discuss what we anticipate for OCTG pricing from here.

The BIG question is, will this inventory destocking trend continue into Q2 and beyond? If imports ramp up this quarter without corresponding demand, we fear that will be equivalent to asking for the moon.

Watch this space.

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Photo Courtesy JD Rush Corporation


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