• Skip to main content

    Market Data

    November 16, 2016

    Oil and Gas Prices and Rotary Rig Counts through November 2016

    Written by Peter Wright

    The prices of oil and natural gas drive the consumption of oil country tubular goods (OCTG) and related steel products. The energy markets represent a large portion of the hot rolled coil used to make pipe and tube as well as equipment used to drill and pump oil and natural gas.

    OPEC is in disarray. At the historic meeting in Algiers on September 28th, Algeria was appointed as chair of the Technical Committee. Its primary responsibility was to define the production-cut mechanisms in each member country as part of the implementation of the decision taken at the meeting. Further meetings took place in Vienna on October 28th and 29th at the OPEC headquarters. These meetings were nonproductive. Instead, on November 14th Iran announced that it intends to increase production in certain fields by 750,000 b/d, but it needs more investment and technology. With a little more than two weeks to go before the end of November OPEC meeting, there is no mechanism to implement a cut to 32.5 to 33.0 million barrels of oil a day. Last week, OPEC disclosed that its members produced 33.6 million barrels per day in October and it is difficult to see which countries would cut production, since Libya, Nigeria, Iraq and Iran have all refused. Saudi Arabia, Kuwait and UAE are the only candidates.

    Peter Wright

    Read more from Peter Wright

    Latest in Market Data

    Final Thoughts: Do Mesabi Metallics and Hyundai-POSCO signal more foreign steel investment in US?

    Could two new steel projects signal a new direction in the marketplace? Both Mesabi Metallics’ recently announced steel facility in Iowa and the Hyundai-POSCO’s proposed mill in Louisiana are major undertakings. You don’t spitball a major steel mill and then start producing the next day. From initial concept to site selection and on up to the first melt, there is a labyrinth of permitting, planning, and construction to navigate before the first heat.

    Lead times extend deeper into 2027, some see no availability until late Feb

    Lead times for sheet and plate products continue to extend in a US steel market still in the grip of a historic supply squeeze, according to the latest SMU steel market survey data. Average lead times now extend into late January 2027, with some mills not quoting availability until mid/late February. Lead times for all sheet products except Galvalume stand at their highest point since the post-Covid demand snapback in 2021. And plate lead times have exceeded their 2021 peak, repeatedly setting new record highs in our data series over the past month. (We started collecting plate lead time data in 2018. Our sheet lead time figures go back to 2012.)

    SMU flat-rolled market survey results now available

    The results of the latest Steel Market Update (SMU) flat-rolled market survey are now available on our website to all premium members. After logging in, look under the Data tab for Market Reports, and there you will find the Flat-Rolled Survey Results section. Previous survey results are also available on that page. If you need help accessing these results, or if your company would like to have your voice heard in our future surveys, contact smu@crugroup.com.

    SMU Survey: Steel mill negotiations remain rare as buyers face tight supply

    Only 5% of steel buyers surveyed by SMU this week said mills were willing to negotiate lower prices for new spot orders, suggesting mills retain substantial pricing leverage in a tight market. The share rose two percentage points from our previous survey two weeks ago but was nine points below the mid-October reading. This week's rate is just slightly higher than our previous survey when the negotiation rate fell to 3% — its lowest level since July 2021. Negotiation rates have trended downward all year as steel prices have continued to climb.