HOUSTON -- The Port of Houston
Authority expects to set a four-year record for steel volumes
in 2012 due to rising pipe and tube imports for the
regions growing oil and gas sector, according to one of
its top executives.
While the ports steel
volumes for 2012 were initially projected at around 4.5 million
short tons, according to estimates released in 2011, year-end
totals have been adjusted to 5.1 million tons, according to
Ricky Kunz, the ports vice president of trade development
and marketing. That figure would mark the highest steel volumes
at the port since 2008, when steel tonnages reached a record 6
We were very fortunate
this year. Steel was very strong I will say, specifically in
pipe for the oil and gas sector, through August. Then, we saw a
bit of a falloff, Kunz told AMM during an
interview in Houston earlier this month.
The year-end decline in pipe and
tube imports appeared to be driven by falling natural gas
prices and, as a result, decreased drilling, he said.
Consequently, there was
inventory buildup and the orders fell off, Kunz said.
As one of the largest steel
ports in the United States, the Port of Houston Authority sees
daily shipments of steel products, such as steel coils and
pipe, coming in from shippers in the Far East, South America
and Europe, in particular.
What were being told
by the importers and traders is that were not going to
see a return that we were enjoying earlier in the year until
the end of the first quarter or possibly the end of the second
quarter, Kunz said. We hope its earlier than
that, but thats what theyre telling us.
And while volumes might remain
subdued in the near term, Kunz said he is optimistic things
will return to
normal in the short term.
This is a very cyclical
business and we just have to deal with those cycles. From a
construction standpoint, we havent seen anything yet.
(But) the Exxons, Shells, Dow Chemicals--all of them are in the
process of building new facilities or upgrading facilities
thats going to create a huge need for pipe, he
Looking forward, Kunz said he is
optimistic that steel volumes will likely remain largely
consistent in 2013, with the port aiming to remain as a major
steel trading hub.
In the second quarter, we
should return to normal. From a tonnage standpoint, Im
expecting maybe 4.2 (million) to 4.3 million tons, he
said. At the end of the day, weve got competition.
But, because of the oil and gas sector, were always going
to be a major steel port.
In recent months, the Port of
Houston Authority has spent some $20 million on a new gate as
it looks to tackle the issue of congestion, which Kunz said has
been a major issue since trucks delivering heavy product arrive
to the port through the same passage as the general public.
Other upgrades have included
tearing down warehouses to provide more lay-down areas.
We need more open area to
accommodate steel products. We tore certain buildings down
because of the nature of the cargo have changed, he said.
We needed more open area to accommodate pipe and steel.
Well likely be tearing down more.