Russia - The Russian pipe market was growing throughout the Q3 of 2012, mainly due to stronger seamless industrial and welded line pipe demand.
In the Q3 of 2012, the seamless OCTG market in Russia remained strong. Q3 Russian oil production increased by 2% compared to the Q2 of 2012. Moreover for the first 9 months of 2012 the total footage of oil wells drilled in Russia increased by 7% YoY.
In the Q3 of 2012, the industrial seamless and welded pipe market in Russia experienced QoQ growth, largely due to high seasonal construction activity in Russia as well as growing demand from the machine building industry.
Americas - OCTG demand in the US saw a steady decline throughout the Q3 of 2012. According to the Baker Hughes rig count, the US finished the quarter at 1,848 active drilling rigs down 6% from the Q2 of 2012. With low natural gas prices, the US gas rig count continued to decline 19% in the Q3 of 2012 compared with the prior quarter. The strong oil rig count growth seen earlier in the year did not continue in the Q3 as the US oil rig count fell 1% compared to the Q2 of 2012.
According to Pipe Logix, in the Q3 of 2012 US industry OCTG shipments increased by 5% as compared to the Q3 of 2011 and were down 8% compared to the Q2 of 2012. Per the OCTG Situation Report, the average OCTG inventory for all products continued to increase and rose above the normal level of months of supply. Although import shipments were slightly below the first and second quarters of 2012, imports continued to exceed domestic shipments in the Q3 of 2012.
Europe - In the Q3 of 2012, the European market conditions further deteriorated due to continued macroeconomic concerns, the Eurozone debt crisis and weakening demand from mechanical engineering, construction and power generation industries. Customers continued to keep inventories at a minimum level and are seeking lower purchase prices.
