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Oil country tubular goods (OCTG) are a type of solid rolled product that consists of casing, drill pipe, and tubing with varying loading requirements depending on the application. The widespread use of hydrocarbons in industries such as power generation, manufacturing, process, and transportation has resulted in a significant increase in exploration and production operations, which is increasing demand for OCTG products.
The OCTG market has grown significantly in recent years, owing to a variety of factors. The rising demand for oil and gas as a source of energy has been a major driver of growth. As a result, drilling and extraction activities have risen, which has resulted in increased demand for OCTG. Furthermore, advances in drilling technology have contributed in the development of more complex and difficult drilling operations, necessitating more specialized and long-lasting OCTG. High oil and gas prices have driven up both domestic and international rig counts. Global OCTG net capacity and capacity utilization are expected to rise as the international recovery in project activity accelerates, particularly in the Middle East across both short and long-cycle developments. Utilization rates have been a major factor in determining earnings for both OCTG producers and steelmakers. As a result, rising utilization rates and net capacity are expected to play a significant role in driving OCTG production. The increased demand for these products is due to a variety of factors, including increased global demand for oil and gas, technological advancements, and consumer preferences. The global oil country tubular good (OCTG) market is expected to be worth US$24.50 billion in 2023, witnessing growth at a CAGR of 6.75%, during the projected period. In addition, the global OCTG production and demand are predicted to reach 13.48 million tons and 16.46 million tons, respectively in 2023.
Segment Covered
By Process: In terms of process, the report offers insights of the global oil country tubular good (OCTG) market into two segments: Seamless and Welded. The seamless segment dominated the OCTG market. The increased use of seamless tube in the oil and gas industry is mostly due to the fact that it is extruded and drawn from a billet. A seamless tube has a short length and normally does not show signs of corrosion unless it is exposed to a severely corrosive environment. The increased exploration activity in off-shore areas, as well as the redevelopment of several oil fields, are likely to give abundant prospects for the expansion of the seamless process of OCTG market.
By Grade: On the basis of grade, the report provides the segmentation of the global market as follows: Premium and API. The premium grade segment leads the global market for oil country tubular goods. Oil and gas reserves are being developed and explored offshore, and this has resulted in a demand for high-grade transportation tubes that can withstand corrosion and provide leak-proof operation and sealing integrity of the connections even when loaded, bent, and subjected to high internal pressure. The demand for premium tubing to carry oil and gas from onshore and offshore fields to the consumer's location is likely to create significant chances for the premium segment oil country tubular goods to grow during the forecasted period.
By Application: The report further offers the bifurcation of the market into two segments according to the application: Onshore and Offshore. Onshore OCTG is expected to be the fastest growing segment in the forecasted period. Onshore OCTG is mainly used in drilling and production operations that are closer to the shore. Onshore OCTG is typically less expensive and easier to obtain, as it is more readily available and does not require the same level of specialized manufacturing and transportation. Onshore OCTG is also subject to less harsh conditions and less stringent safety regulations. The onshore OCTG market is also being driven by the increasing use of horizontal drilling and hydraulic fracturing techniques.
By Product: The report also identifies four segments on the basis of product: Well Casing, Production Tubing, Drill Pipe & Others. Well Casing is expected to be the fastest growing segment in the forecasted period. Well casing is a large diameter pipe that is inserted into a borehole's drilled section. This casing is typically held in place by cement or other materials placed between the casings and the wellbore. It is regarded as an important part of the well completion process. The rise in demand for well casing in this market is primarily due to the fact that it aids in the drilling process in a variety of ways, including providing a strong foundation to allow the use of high density drilling fluid to continue drilling deeper and providing a smooth internal bore for installing production equipment, all of which are expected to provide ample opportunities for the growth of the well casing product in the oil country tubular goods market.
Geographic Coverage
According to this report, the global oil country tubular good (OCTG) market is divided into five regions: North America, Asia Pacific, Europe, Middle East & Africa and Latin America. The countries covered in North America region are the US, Canada, and Mexico, while Europe includes UK, Italy, Germany, and Rest of Europe. Moreover, China, India, Japan, South Korea, and Rest of the Asia Pacific are included in the Asia Pacific region. North America accounted for the maximum share of the global market. The US is one of the largest oil and gas producer. The increased use of premium quality products in remote areas with harsh environments has resulted in an increase in deep-water exploration, which drives market growth. The US has become a major importer of OCTG, sourcing products from countries such as Japan, South Korea, and several European countries. One of the key factors contributing to this growth is the easing of trade restrictions on OCTG imports in the region. Mexico is one of the major offshore deep-water reserves, and production is expected to increase during the forecast period. The Asia Pacific market is expected to expand significantly during the forecast period, driven by the increasing demand for energy in the region. The region is home to some of the world's largest oil and gas producing countries, including China, and India, which are driving the demand for OCTG products. In addition, the region is also witnessing an increase in exploration and production activities, which is further boosting the market.
Top Impacting Factors
Growth Drivers
- Growing Oil Demand
- Rising Energy Consumption
- Growth in Hydraulic Fracturing Activities
- Technological Innovation in Drilling Techniques
Challenges
- Increasing OCTG Prices in the US
- Environmental Issues
Trends
- Escalating Investment in Offshore Drilling Activities
- Increasing R&D Spending in Energy Sector
- Rise in Horizontal Directional Drilling for Oil & Gas Excavations
- Easing Trade Restrictions in North America
Driver: Growing Oil Demand
Growing oil demand is a major driving factor of the OCTG (Oil Country Tubular Goods) market. As the global economy continues to expand, so does the demand for oil and gas, which are essential inputs for transportation, power generation, and industrial production. As a result, more oil and gas wells are being drilled, leading to increased demand for OCTG products. OCTG products, such as drilling pipe, casing, and tubing, are critical components in the drilling and production of oil and gas wells. These products are used to protect the wellbore and to keep the well from collapsing, as well as to allow oil and gas to flow to the surface. As the number of wells drilled increases, so does the demand for OCTG products.
Challenge: Increasing OCTG Prices in the US
The steel and metal industry, which includes the production of OCTG, is highly sensitive to fluctuations in supply and demand, as well as changes in raw material prices. As a result, prices for OCTG products in the US have risen in recent years, presenting several challenges to the OCTG market. Higher prices can lead to decreased demand for these products. As prices rise, customers may opt for alternative materials or turn to foreign suppliers who offer lower prices. This can result in decreased market share for domestic producers and reduced profits for the industry as a whole. The increasing OCTG prices places the strain on the supply chain. As prices increase, suppliers may struggle to meet the demand for OCTG products, leading to shortages and supply chain disruptions. Decreased demand, decreased competitiveness, increased inflation, and government intervention are all potential consequences of these rising prices, which can hamper the growth of the global OCTG market.
Trend: Escalating Investment in Offshore Drilling Activities
Offshore drilling activities refer to the process of extracting oil and natural gas from beneath the ocean floor. These activities have become increasingly popular in recent years due to the increasing demand for energy and the depletion of onshore reserves. The increasing investment in offshore drilling activities is a driving factor of the market for oil country tubular goods (OCTG), which includes the pipes, casing, and tubing used in the drilling process. The increasing use of technology and the growth of emerging economies have also contributed to the growing demand for energy. As a result, companies are looking to offshore drilling as a way to meet this demand and ensure a steady supply of energy. The increasing investment in offshore drilling activities has also led to advancements in technology and equipment. As companies look to extract oil and natural gas from increasingly difficult environments, they are investing in new technologies and equipment to make the process more efficient and cost-effective, which is expected to drive the growth of OCTG market in coming years.
The COVID-19 Analysis
COVID 19 pandemic has negatively impacted every facet of the global economy, including the OCTG market. OCTG is a vital component of the oil and gas industry, used in the production of oil and gas wells. The global COVID-19 pandemic caused a dramatic drop in the rig count. The lower rig count resulted in lower rates of oil and gas E&P activities, causing demand for tubular and casting products to fall which eventually hampered the global OCTG market in 2020. In addition to the decrease in demand, the COVID-19 pandemic has caused a disruption in the supply chain of OCTG. Moreover, the pandemic has caused global oil demand to plummet. This has caused a major glut of stored crude oil as producers were unable to sell their products. This has caused prices to fall to their lowest levels in decades, with Brent crude prices dropping to as low as US$15 per barrel in April 2020. Despite the short-term challenges posed by the pandemic, the post COVID outlook for the oil country tubular good (OCTG) market looks positive. As the world slowly emerges from the pandemic, the demand for OCTG is expected to increase. The oil industry is likely to witness a surge in exploration activities, resulting in an increase in the demand for OCTG. This is primarily due to the fact that OCTG is used in the extraction of oil and gas, and thus the increased exploration activities are expected to drive the demand for OCTG. Furthermore, the demand for OCTG is expected to be driven by the increased demand for energy in the long-term. As the world transitions to renewable sources of energy, oil and gas will remain a major energy source. This will result in an increase in the demand for OCTG to support exploration activities.
Analysis of Key Players
Global oil country tubular good (OCTG) market is moderately consolidated, with increasing acquisitions, collaboration, and product launches. Competition in the OCTG market is intense, with players focusing on improving product quality, increasing production capacity, and expanding their global reach. Price competition is also a significant factor in the market, with companies looking to offer competitive prices to gain a larger share of the market. The key players in the global oil country tubular good (OCTG) market are ArcelorMittal S.A., JFE Holdings Inc., Tenaris S.A., MRC Global Inc., EVRAZ PLC, NOV Inc., Nippon Steel Corp, United States Steel Corporation, Vallourec S.A., ILJIN Steel Co., Ltd., PAO TMK, Canam Pipe & Supply, J-Hobbs Machine Corp.
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Table of Contents
1. Executive Summary
Companies Mentioned
- ArcelorMittal S.A.
- Canam Pipe & Supply
- EVRAZ Plc
- ILJIN Steel Co., Ltd
- J-Hobbs Machine Corp.
- JFE Holdings Inc.
- MRC Global Inc.
- NOV Inc.
- Nippon Steel Corp
- PAO TMK
- Tenaris S.A.
- United States Steel Corp.
- Vallourec S.A.
