Prices hold, pipe buying stalls
Seamless prices remained broadly stable in much of the world this month - with the notable exception of falling Japan fob prices, because oil and gas producers have been less inclined to fight for premium products as they cut their capital expenditure - but this was not the result of a balanced market. Demand remains weak and it is the dearth of trading activity that has been preventing prices from falling further.

Middle Eastern purchasing activity typically dries up at the start of the third quarter before picking up in September, and the lack of big tenders in sight as projects slow or are postponed or canceled further exacerbates the problem.

US drilling activity has also continued to slow in recent weeks, leaving little options to export pipes there for countries that can under Section 232.

US OCTG close to the bottom
The US rig count is now approaching our expected low point of 250 rigs, and we expect demand to then stabilize, but at an extremely low level with oil country tubular goods (OCTG) sales maintained only to fill orders as needed. We have little hope that drilling activity and pipe buying will resume in earnest until well into 2021.

Scrap to soften, but China may provide floor
Scrap prices are expected to edge lower in the coming months, which would leave room for some seamless price cuts, but a tightening of the Chinese market could provide a floor to the decline as margins there are to the bone.

A modest support to global pipe demand may also be provided by Norwegian and Russian measures to support the drilling industry.

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