Rystad Energy: OCTG Prices Continue to Rise
Increasing energy demand and a surge in North Sea exploration activity has increased the appetite for OCTG in the North Sea market, particularly in Norway, after a slowdown during the pandemic.
The carbon OCTG and 13Cr OCTG markets are absorbing excess inventories and restocking for upcoming North Sea operations, a move that is expected to drive up both prices and consumption of OCTG.
Some projects may struggle to be furnished during the peak drilling window this summer amid current long lead times from mills and depleted inventories that are not being restocked at pre-pandemic rates, which may trigger a price spike in the summer months.
High shipping costs will make an additional upward pressure on OCTG prices, particularly coming from Japan.
Higher demand from overseas buyers may also support the uptrend in the OCTG North Sea market.
European suppliers have started to see more enquiries from US customers facing a shortage of casing.
European inventories are now being shipped to the US based on attractive selling prices.
OCTG stocked in the North Sea market is often used for projects in North and West Africa, and stronger demand from that region may compensate the possible reduction in project activity in the UK market.
Overall, scarcity of material and high prices will remain key features of the North Sea market of OCTG.
