In a deal that shows just how quickly falling prices can upend the energy industry, Halliburton is buying rival oilfield services company Baker Hughes in a cash-and-stock deal worth $34.6 billion.
Global oil prices have tumbled 31% over the past 5 months to levels not seen in 4 years. That has forced the industry cut costs by delaying or scaling back drilling — which means less work for Halliburton and Baker Hughes, companies that manage oil and gas fields for energy companies. Halliburton Chairman and CEO Dave Lesar said Monday that the combined company will be able to reduce costs by $2 billion a year.
Both are large steel tube consumers for use in their oil field services businesses.
Chinese steel prices were flat for the day. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($136.77) and a low price of CNY 830.00 ($135.14) per dry metric ton. The price of Chinese HRC held steady at CNY 2,970 ($483.57) per metric ton. For the fifth consecutive day, the price of Chinese coking coal held flat at CNY 1,390 ($226.32) per metric ton.
The steel billet cash price saw essentially no change on the LME for the fifth day in a row, remaining around $465.00 per metric ton. For the fifth day in a row, the 3-month price of steel billet remained essentially flat on the LME at $455.00 per metric ton.
After a couple of days of decreasing prices, the 3-month price of the US HRC futures contract held steady at $630.00. The spot price of the US HRC futures contract saw little movement at $632.00 per short ton.