Canada’s TRQ System Reshapes Oil Country Tubular Goods Market

The last months have confirmed that Canada’s implementation of the Customs tariff rate system (TRQ) is reshaping the market for the tubular goods of the oil country (OCTG) and LinePIPE. The system, which was launched this summer, is already affecting purchasing strategies as companies adapt to the most strict import channels and higher costs. Rystad Energy expects a moderate escalating pressure on Canadian OCTG and LinePipe prices in the medium term with the increasing demand for pipeline and competition for import classes.

The TRQ system entered into two phases this summer: On June 27 for the countries of the Non -Free Trade Agreement (FTA) and on August 1 for the exporters of the Free Trade Agreement, with the exception of the United States and Mexico. This policy aims to protect local Octg and LinePipe producers from the mobile flows transferred after the American tariff and set the priorities of Canadian materials designed for government projects. However, the modest quarterly classes-that is, up to 7,816 tons in the quarter of the numbers of non-FTA assets and 5,086 tons for large diameter devices-by 50 % punishment for excessive cultivation, create a structural narrow in the market. Imports that include Chinese steel are facing an additional 25 % tax, restricting viable supply options. All shares are given on the basis of those who come first serving first, with no collapse by country, supplier or product type.

This structure creates great risks for both suppliers and buyers. Since the import permits are customized in the actual time without a clear vision, it will remain very difficult for foreign suppliers to control whether their shipments will decrease inside or external the sizes of shares. Once it is exhausted, the materials that reach the Canadian ports become 50 % weapon tax. To manage this uncertainty, many suppliers now issue double-priced offers for Canadian buyers-which reflects the normative cost of landing and another including additional fees if taxes are imposed on the shipment upon arrival. This lack of the ability to predict more complexity to purchase strategies and increased total transactions.

In practice, the TRQ system is equally applied to non -manufactured products in Canada, which means that local buyers may still need to import and pay premium installments due to limited local alternatives. As a result, the burden ultimately falls on Canadian buyers, who face higher costs and reduce elasticity. Although the system aims to protect local mills, it also extends to unspeakable products, which inflates purchasing challenges.

Despite these opposite winds, the prices of Octg and Linpepe were fixed in Canada. Stability is expected to continue through the end of the year, supported by control levels, pricing disciplined distributors, and limited access to import. Looking at the future, the volatility is likely to increase with the exhaustion of the quota approach, especially during the heavy workplace when the demand is high. For Octg, rehabilitation requirements make it difficult, leaving the final users vulnerable to the high cost of the late quarter. In sin, the project’s large -diameter tenders can quickly exhaust the shares, forcing buyers to resort to local mills or face additional fees. This dynamic supports more ISIS local price for Octo G and Linpepe.