In May of this year, imports of OCTG surged and greatly exceeded the lagging demand, leaving stockpiles of OCTG and lowered spirits. However, the past 90 days have shown that inventories of “prime” U.S. OCTG have, in fact, decreased due to the cuts in shipments made by domestic mills. This reflects the watchful attention distributors are placing on inventory, something critical to keeping the ratio of supply and demand in sync.

The ideal scenario would reflect crude prices stabilizing in the mid 50s to 60s while overall OCTG inventory continues to whittle down. These large inventory cuts must happen in the coming months in order to make up for the beginning of the year surplus in supply.

Given WTI prices currently and the low confidence in a rebound this year, E&P’s have understandably stopped spending. Most have flown through majority of their budgets in the first half of 2015, leaving a strained cash flow for all. While this time is anything but enjoyable for E&P’s and OCTG, history tells us to keep your head above water and the reward will equal the effort.

Source: The OCTG Situation Report

We can all agree with Investopedia that quality control is “the process through which a business seeks to ensure that product quality is maintained or improved and errors are reduced or eliminated.” This definition spans all industries, but the criteria by which companies pass or fail a product is a different story.

Many OCTG MFL (magnetic flux leakage) inspection equipment manufacturers claim their machines detect flaws on 0.545” (13.84mm) walls and greater during the inspection process, but often these claims ignore a key component of a quality inspection – repeatability.

API 5CT specifications require a minimum of 20% repeatability on all inspection runs. Oftentimes the detectability specifications given by EMI vendors to the steel mills, processors, or inspection companies are a reflection of the equipment manufacturer’s upper limits of detection capabilities, or best case scenarios—and they hope to address the repeatability of their equipment much later in the vendor selection process. “In our opinion, there needs to be more focus on repeatability much earlier in the technical evaluations” said Danny Uselton, President of Scan Systems Corp.

In EMI inspection, repeatability comes down to the equipment’s hardware and software capabilities to identify the signal given by an imperfection or artificial reference indicator and report those imperfections at a similar amplitude… consistently and repeatedly. The long and short of it is, the equipment must have the capability to pick up the flaw and break the alarm threshold each and every time in order to provide the level of confidence in the inspection that API requires. If the signal from a flaw falls within an area of significant noise generated from the pipe, it may stand out during one pass (detected), but get lost “in the grass” during the next run (repeatability). Using advanced signal processing algorithms combined with proprietary sensors and cutting-edge signal detection hardware, Scan Systems’ PITCO M-Series with ESP upgrade has dramatically improved the ability to separate a flaw’s signal from the background noise offering the best S:N ratio on any given pipe in the industry.

For Matt Rutledge, General Manager/VP of Scan Systems, repeatability is a top priority and something customers should ask about sooner in the vendor selection process. “Surprisingly, many steel mills, processors, and third party inspection companies neglect to inquire about the inspection equipment’s capabilities in regards to repeatability until much later in the selection process.”

While 0.400” (10mm) pipe wall thickness has historically been the limit for existing EMI/MFL inspection equipment, Scan Systems’ PITCO M-Series with ESP upgrade can reliably detect and repeat on N5 ID notches up to 0.545” (13.84mm) wall thickness and N10 ID notches up to 0.625” (15.875mm) walls. This ability to accurately detect and repeat on these types of indications is truly a remarkable accomplishment by the employees in the R&D department of Scan Systems Corporation.

When equipment vendors quote specifications that exceed the known capabilities of EMI equipment currently in operation, the best thing for you to do is ask the vendor to demonstrate their claims. Danny Uselton commented, “At Scan Systems, that is how we separate ourselves from others who claim similar capabilities who don’t think they will ever have to prove it. We love demonstrating our systems’ capabilities and explaining the processing software and sensor technology we have developed to advance our industry.”