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Meachinical tube producers riding out ‘OK’ year

Keywords: Tags  mechanical tube demand, mechanical tube imports, mechanical tube market forecast, Edward Vore, ArcelorMittal Tubular Products North America, Shawn Seanor, Timken, Tim Spatafore Marmon/Keystone

The mechanical tubing market continues to be fairly good, flattening out at a relatively high plateau, but isn’t nearly as tight as it was a year ago, when many mills had their customers on allocation or controlled order entry.

With additional headwinds expected to move in during the second half, most mills are leery about making predictions for 2013.

This year “has been an OK year on average, with some pockets (of end-use activity) being very good and others that are not good at all,” said Edward Vore, vice president of marketing and sales at ArcelorMittal Tubular Products North America.

Given that mechanical tubing demand tends to be reflective of overall industrial production and gross domestic product growth, a lot rides on what happens with the United States and global economies, he said.

“The demand is still there, although a number of end-use markets are softening to a certain degree and a lot of inventories are being worked down,” said Shawn Seanor, vice president of oil and gas engineered steel solutions at Timken Co., Canton, Ohio. He pointed to the Institute for Supply Management’s purchasing managers’ index slipping below 50 percent in June, July and August as an early warning sign, especially with distributors’ months of supply on hand increasing, albeit slightly, over the summer.

There also has been an increase in import offerings, especially along the coasts, as a number of world markets struggle more than in the recent past and amid a strengthening of the dollar against the euro, Tim Spatafore, president of Marmon/Keystone LLC, Butler, Pa., said. “But while some distributors are starting to sniff around, we won’t take a chance on them. There has to be a more significant difference between the import and domestic prices before we do.”

There likely will be a few months of correction ahead, Seanor said, but he is optimistic that the industry will end the year on a positive note.

Nevertheless, the significant governmental issues that have yet to be resolved make it difficult to predict what 2013 will look like for the mechanical tubing market, Vore said. “A large tax increase impact or spending reduction from the full implementation of sequestration spending cuts could make 2013 a very difficult business environment, at least for the first half of the year.” 

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Latest Pricing Trends Year Over Year


After witnessing the pace of steel plant idlings and worker layoffs during the first half of the year, what is your view of the second half of 2015? (choose one)

No matter what else happens, layoffs and shutdowns, etc., have nearly or essentially stopped for the year.
The environment will change little and the pace of layoffs will continue at a similar rate as the first half of 2015.
The environment will change little yet the pace of layoffs will begin to slow slightly to moderately.
The environment will change little yet the pace of layoffs could exceed the rate seen thus far.
The environment will improve slightly to moderately yet hiring and plant restarts will not resume this year.
The environment will improve slightly to moderately, with hiring and plant restarts commencing.
The environment will improve dramatically yet hiring and plant restarts will still be negligible in comparison.
The environment will improve dramatically yet hiring and plant restarts will only be slight to moderate.
The environment will improve dramatically, with hiring and plant restarts occurring nearly in tandem.

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