NEW YORK Tenaris SA will
continue to capitalize on the North American energy boom after
a strong 2012, despite competition from low-priced South Korean
imports, executives said during a Feb. 22 earnings call.
"Our position in North America
has strengthened substantially through the year," Tenaris
chairman and chief executive officer Paolo Rocca told
investors, citing as a driver the companys leading
position in Gulf of Mexico deepwater drilling and U.S. shale
Tenaris North American
tube sales rose 22 percent over 2011 to $4.95 billion in 2012,
an increase the company said was driven by greater
liquids-drilling activity and recovery in the Gulf of Mexico.
The increase in North American sales, paired with an 11-percent
increase in South American sales, accounted for most of the
companys $861.5-million increase in sales in 2012 over
The Luxembourg-based steel tube
and pipe manufacturer described its $1.3-billion to
$1.5-billion investment in a new seamless pipe mill in Bay
City, Texas, scheduled to begin production in 2016, as part of
its plan to expand further in North American markets (
amm.com, Feb. 15).
"The new mill in Bay City
reflects our confidence in the development of North America as
a new frontier for the entire energy industry," Rocca said.
But the company has seen cheap
imports, particularly tube from South Korea, threaten its
domestic market share.
"No doubt there is increasing
pressure for share of imports into the United States," Rocca
said. "The share of imports (has) reached close to 55 percent
of the overall market, and some of the players, like Korea,
have really been very, very aggressive in recent months. This
has put pressure on the low end of the market."
Rocca referenced discussion
among U.S. oil country tubular goods (OCTG) market participants
who see themselves on the defensive and favor duties against
amm.com, Jan. 16), saying a trade case would be
Although Korean imports continue
to affect the market, increasing demand will relieve some
pressure by the end of the year, North American area manager
Germán Curá said during the conference call.
Tenaris also said that its business had not been as impacted by
imports of more complex products, for which it sees higher
Tenaris posted 2012 net income
of nearly $1.7 billion, up 27.6 percent from $1.33 billion the
previous year, on an 8.6-percent increase in sales to more than
$10.83 billion. But fourth-quarter net income fell 10.5 percent
to $357.7 million from $399.6 million in the same period a year
earlier on sales that inched up 0.3 percent to nearly $2.76