Build it and the buyers will
come. At least, thats what more than a few pipe mills
appear to be banking on with new or soon-to-be built oil
country tubular goods (OCTG) projects in the United States.
U.S. Steel Corp., Pittsburgh,
remains the top player in terms of U.S. OCTG production
capacity, which AMM estimates at about 1.7 million
tons per year.
But Luxembourg-based Tenaris SA
is hot on its heels, with 1.3 million tons in annual production
capacity. While Petróleos Mexicanos will gobble up much
of the output from Tenaris new 450,000-ton-per-year
small-diameter seamless pipe mill in Veracruz, Mexico,
commissioned in May after rolling its first pipe in November
2010, Tenaris has said that 70 percent of that production might
And plans by Frances
Vallourec SA to expand in the United States set up a three-way
battle for king of the hill in the premium U.S. OCTG market.
Vallourec already had an annual capacity of 550,000 tons in the
United States and plans to add another 550,000 tons with its
new small-diameter seamless rolling mill in Youngstown, Ohio,
scheduled to roll its first pipe late this year. Assuming
Tenaris and Vallourec ramp up to full production in 2012, next
year could see 1 million tons added to the North American
market from those two companies alone.
On the seamless front,
Chinas Tianjin Pipe (Group) Corp. plans to break ground
on a $1-billion, 550,000-ton-per-year seamless pipe mill near
Corpus Christi, Texas. In the welded market, Boomerang Tube
LLC, Chesterfield, Mo., is already churning out OCTG and line
pipe from its new 360,000-ton-per-year pipe mill in Liberty,
Texas, and Northwest Pipe Co. continues to ramp up production
at its retooled welded OCTG mill at Bossier City, La., with a
capacity of 125,000 tons.
Those three projects represent
another 1 million tons of OCTG capacity, with more to come from
the welded OCTG mill being built in Thomasville, Ala., by
Welland, Ontario-based Lakeside Steel Inc., and expansions by
rival Welded Tube of Canada Ltd. in Concord, Ontario.
U.S. mills shipped 2,163,128
tons of OCTG in 2010, according to data from the American Iron
and Steel Institute, Washington. The U.S. also imported
2,384,004 tons of OCTG, according to SteelFacts, McKees Rocks,
Pa.. With exports put at 402,954 tons, apparent consumption was
around 4.14 million tons.