Oilfield Products

FT Graff

BD & SCM - Fittings, Flanges, Alloys & Oilfield Supply


Shale play activity continues to gain momentum in the US. With the anticipated demand for tooling as well as maintenance items and safety products trending upward, supply is expected to keep up through 2014. However, as raw material costs continue to escalate and higher labor costs are combined with tighter regulations on Chinese manufacturers, upward pressure on production costs is expected to cause increases of 5% to 7% in 2014.

Steel pricing remains stable and is not expected to impact the prices of oilfield products such as unions, flow controls, sucker rods, pump jacks, tanks and other production equipment. However, increased transportation, healthcare and labor costs are likely to result in higher pricing this year. Lead times are currently in line with demand and MRC Global expects this to remain the case through 2014.

Inventory and lead times should remain stable for fiberglass pipe and fittings in the first half of 2014. At present, fiberglass pipe requirements are not expected to grow significantly - a result of the emergent number of completed gathering fields and the prevailing transition from single well pads to multi-well pads. However, an expanding interest in faster, easier-to-install, spoolable fiberglass products has motivated MRC Global to bolster regional product offerings to satisfy customer requests.

Demand for high density polyethylene pipe (HDPE) continues to be strong and is expected to increase as spring arrives in the US. Resin prices saw recent increases of 4% with another 5% to 6% in the coming months. While traditional applications for HDPE remain strong, especially in Oklahoma and the Permian Basin, increased demand from gas utilities may put pressure on deliveries down the road. Currently, lead times for small and large diameters are running at 2 to 6 week range. HDPE fittings, flange adapters and the associated backup rings are in plentiful supply and can be pulled from stock in most cases.



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