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    Analysis

    Active Oil and Gas Rig Counts Mixed

    Written by Brett Linton


    According to Baker Hughes data from June 27th, 2014, the U.S rig count for this week is 1,873 rigs exploring for or developing oil or natural gas. This count is an increase of 15 rigs when compared to last week, with oil rigs up 13 to 1,558 rigs, gas rigs up 3 to 314 rigs, and miscellaneous rigs down 1 to 1 rig. Compared to last year the 1,873 count is an increase of 125 rigs, with oil rigs up by 168, gas rigs down by 39, and miscellaneous rigs down by 4.

    The Canadian rig count decreased by 29 to 236 rigs this week, with oil rigs down 25 to 141 rigs and gas rigs down 4 to 95 rigs. Compared to last year the 236 count is an increase of 30 rigs, with oil rigs down by 7 and gas rigs up by 37. International rigs increased by 1 to 1,350 rigs for the month of May, an increase of 67 rigs from the same month one year ago. For a history of both the US and Canadian rig count click here.

    Brett Linton

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    Steel market chatter this week

    Steel market chatter this week Earlier this week, SMU polled steel buyers on an array of topics, ranging from market prices, demand, and inventories to tariffs, imports, and evolving market events. We are sharing a selection of the comments we received below, in each buyer’s own words. Before diving in, we reviewed all of the responses collected and compiled these key takeaways: • Most buyers continue to expect higher prices in the near future and report that demand is stable to improving. • Inventories are moving faster than they were this time last year for most respondents, attributed to limited availability and leaner supply chains. • Imports are attractive for many buyers on both price and availability, though quotas, long lead times, and quality concerns continue to limit their appeal. • Buyers were split on whether tariff policies are helping their businesses, while a slight majority reported some evidence of manufacturing reshoring, though many said it is still too early to tell. Want to share your thoughts? Contact david@steelmarketupdate.com to be included in our market questionnaires. How do you expect prices to trend over the next three months? “I expect prices to rise at a fairly rapid pace for at least the next two to three months because inventories will continue to decrease.” “Upward, capacity remains tight.” “Climbing for several months.” “Trending toward $1,300/st HRC, only because one small player is driving prices up with no one else selling spot.” “Higher, the Q1 bump is not showing in the futures market.” “We expect things to keep going up from here. Next year could get ugly, but we're not there yet.” “Still trending up. There are some soft spots getting softer, but still steady demand and a shortage of supply.” “Continue to rise slowly.” “Slow increases like they have been doing.” “Upward due to continued demand and mill maintenance outages.” “Will remain high but steady due to demand and tariff implications.” “Plate prices most likely will be flat to up over the next three months.” Is demand improving, declining or stable? “Demand is stable (if anything, overstated), with inventories so lean, late mill deliveries, and contract prices increasing next year.” “Demand is fairly consistent with the rest of the year.” “Stable, but very strong for our products.” “Stable as many projects are trying to get ahead of potential additional price increases.” “Stable due to the ‘slow season’ in our market.” “Plate demand is stable to improving.” “Demand is good to improving. We'll take it!” “Improving, but still not to 100% capacity.” Is inventory moving faster or slower than this time last year? “Faster... once it arrives (late), it goes right back out.” “Faster due to lack of availability and bullwhip buying.” “Inventory is moving faster this year than last because demand is stronger than last year and many of our competitors don't have as much steel to offer.” “Inventory is moving faster with supply chains so lean.” “Inventory is moving at a good clip. Just based on costs/spends, we're stocking less sheet, coil and plate though.” “Plate inventory is moving at a much faster pace year over year due to several factors.” “Faster due to a shortage of supply plus added demand.” “About the same.” Are President Trump's tariff policies helping your business? Buyers were split this week, with 44% believing the tariffs are helping their business and 44% saying they are not. The remaining 11% were unsure how the policies will impact them. Comments included: “Yes for now. Prices are very high, which causes people to buy before prices get higher.” “Yes, I credit Trump's policies and data centers for improving demand.” “Yes, inventory values continue to go up.” “They are helping on the sell side and hurting on the buy side.” “No, they are creating shortages and increasing the cost of steel.” Are you seeing evidence of manufacturing reshoring to the US because of Trump's tariffs? The slight majority of respondents (39%) reported they have seen some evidence of reshoring, a higher rate compared to recent surveys. A third said it is too early to say, and 28% answered they are not seeing any signs of reshoring. Comments included: “Yes. Perhaps reshoring has added to the increased demand in 2026.” “Yes, with machining and turning.” “Yes, capacity versus demand in North America is creating pressure to reshore products.” “Too early to say. There have been a lot of announcements, but steel availability has limited immediate moves.” Are imports more attractive than domestic material? “Imports are more attractive on a pricing front and an availability standpoint, but lead times are extended.” “Imports are attractive in both price and because they offer additional availability. Whether or not they show up and or as offered is another issue.” “Imports are certainly attractive. They're coming in in earnest, so this run will peter out early next year.” “Attractive due to price and availability.” “Attractive, domestic tons are unavailable.” “Yes on light gauge painted.” “Without quotas, yes, the price is more attractive. But if you get caught with the quota, pricing is very high.” “Not to us, but we are hearing more about affordable imports.” “Plate imports are only slightly more attractive than domestically produced plate.” “Not yet, shipping lag is still too large.” “No due to tariffs.” What's something that's going on in the market that nobody is talking about? “What is the latest on SDI/BlueScope? I had heard it was back on the ‘front burner’ but all is quiet now. Maybe that means a deal is getting close?” “Will the US bring a trade case against South Korea over imports spiking?” “Busheling scrap prices are flat, while hot roll continues to rise. The scrap gap is increasing.” “How will the next administration handle tariffs that have so limited our steel supply?” “Mill discipline in production capacity.” “Coke pricing levels due to demand and supply.” “Shipbuilding.”