Price Competition Goes Severe for Oil Well Tubular

Price competition of oil well tubular is getting severe when Chinese tube makers are offering cheap price under shrinking oil well tubular market. International price of commodity grade oil well tubular such as K55 or L80 decreased by US$ 1,000 to FOB US$ 800-1,000 per tonne from the peak in 2008.

The demand of oil well tubular increased largely in the first half of 2008 when crude oil price hit the peak at over US$ 147 per barrel and raw material prices were rising. On the other hand, Chinese tubular makers increased the export.

However, oil companies’ financial power dropped when crude oil price dropped to below US$ 40 at the end of December 2008. Especially, investment shrank by new oil companies or government managed oil companies. US oil well tubular market is shrinking which accounts for 50% of the world.

Dealers’ inventory volume of oil well tubular in USA is well over decent level due to inflow Chinese oil well tubular. American steel makers took Chinese oil well tubular import to the court as anti-damping on 8 April. Consequently, Chinese tubular shifted to flow into Middle and Nar East or Asia. Price competition is getting up steam mainly for commodity grade products. International price is decreasing from the beginning of this year.