The price of oil and gas pipe coating services is projected to continue rising in the three years to 2017 due to the expected growth in domestic production of oil and gas.
Los Angeles, CA (PRWEB) July 30, 2014
The market for oil and gas pipe coating services has a buyer power score of 2.9 out of 5, reflecting a moderate level of purchasing power for buyers. Buyer power is primarily limited by the low availability of substitute services. Furthermore, oil drilling and gas extraction firms are required to provide adequate coating for pipes, and the only viable alternative involves setting up a costly in-house team to perform the services. Due to the mandatory nature of pipe coating services, buyers should consider entering multiyear supply agreements with vendors, thus locking in current prices and hedging against future price volatility. “The relatively small number of suppliers also boosts the pricing leverage of vendors,” says IBISWorld procurement analyst Agiimaa Kruchkin. “However, buyer power is aided by low market share concentration, negligible vendor financial risk and the low recent price volatility.” The four largest vendors are multinational firms like Aegion Corporation and Tenaris, which supply a variety of OCTG products and services.
Over the past three years, domestic oil drilling and gas exploration activities have rebounded strongly on the back of a reviving economy, which has boosted demand for oil and gas pipe coating services. Furthermore, external demand drivers have mostly risen alongside the rebounding activity in buyer markets. For example, the industrial production index and the world production of oil have trended upward during the past three years, fueling demand for pipe coating solutions. “Likewise, the value of construction has risen strongly, boosting demand for the coatings used in new oil and gas pipelines,” adds Kruchkin. Consequently, the price of pipe coating services is anticipated to grow moderately over the three years to 2014, hampering buyer negotiation power.
Demand for oil and gas pipe coating services is projected to strengthen further during the three years to 2017. As a result, service prices are projected to grow more rapidly over this period, favoring suppliers and hurting buyers. At the same time, price volatility is forecast to subside further during the period, providing some relief to buyers. For more information, visit IBISWorld’s Oil & Gas Pipe Coating Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of oil and gas pipe coating services. Pipe coatings, which fall under oil country tubular goods (OCTG), are suitable for corrosive environments and withstand high temperatures, scaling and pitch, thus allowing for an efficient flow of oil and gas through the pipe. Suppliers in this market provide single-, double- and triple-layer external pipe coating services, as well as internal pipe coating solutions. Vendors of pipe coating services also prepare the pipes, apply the primer and topcoat, supervise adhesion testing and perform repairs. This report does not cover oil country tubular modification and testing services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.