JFE Steel Raises Steel Tube for Oil Well by US$ 400 for April-September

JFE Steel agreed the price hike of steel tube for oil well by US$ 300-400 per tonne with Oil companies for April-September from January-March. The firm raised the price by US$ 300 for April-June and additionally raised by US$ 100 for July-September due to rising iron ore and coal prices. The demand for oil well steel tube decreased rapidly in last year while recovered in this year. The firm will raise the price for October shipping and starts the price negotiation from July. The firm announced to change long period contract to quarter base to users when raw material price changes with quarter.

The supply and demand balance is tight when oil companies are keen to develop new oil mine thanks to expanding energy demand. Especially, the demand for small size seamless steel tube is increasing rapidly when development of shale gas. Order from shale gas earthwork companies is increasing by double to JFE Steel in this year from last years. The firm’s 13% chrome seamless steel tube is valued for high quality.

Chinese or Malaysian oil companies are developing oil or gas mine in Middle and Near East. The market price of steel tube for oil well is increasing.

The demand for steel tube for oil well is expected to continue to be firm. JFE Steel forecasts the demand increases by 10-20% in 2011 from 2010.