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MRC turns focus away from OCTG, records loss

Keywords: Tags  MRC Global, earnings report, Andrew Lane, OCTG, line pipe, Thorsten Schier

NEW YORK — MRC Global Inc. is moving away from the oil country tubular goods (OCTG) sector, seeing little upside for the market.

"I’m not a very big optimist about the future pricing environment in OCTG. You have relatively flat rig demand, you have a lot of imports still coming to the market, and you have domestic supply coming onstream," chairman, president and chief executive officer Andrew Lane said during the company’s fourth-quarter earnings conference call.

As a result, the company began "strategically de-emphasizing" OCTG in 2012, Lane said in comments accompanying MRC’s financial report.

MRC—the largest global distributor of pipe, valves and fittings and related products and services to the energy and industrial sectors, according to its website—is more bullish on the line pipe market, in which even low natural gas prices are not crimping demand.

"Low natural gas and natural gas liquids prices are not dampening pipeline infrastructure spending in the North American market, as the industry works to catch up with historical quantities of production needed to get to end markets," Lane said during the conference call.

The Houston-based company also is confident that increased switching from coal-based power to gas and eventual exports of liquefied natural gas "bode well for this part of the market," Lane said.

MRC posted a fourth-quarter net loss of $6.44 million in contrast to net income of $3.56 million in the same period a year earlier on sales of nearly $1.31 billion, virtually flat with a year earlier. Full-year net income jumped to $117.96 million from $28.98 million in 2011 on a 15.3-percent increase in sales to more than $5.57 billion.

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