NEW YORK The U.S. pipe
industry is set to benefit from growing natural gas demand,
according to a top executive at Welspun Global Trade LLC.
The reshoring of manufacturing
is one factor likely to increase demand.
"Theres a lot of
manufacturing, due to the low energy prices, thats moving
back to the U.S.," Joel Johnson, Welspun Global Trades
senior vice president of sales and marketing for the Americas,
told participants at the National Association of Steel Pipe
Distributors (NASPD) 2013 annual convention in Las
At the same time, gas is
supplanting more expensive coal as an energy source. "Due to
the low gas prices, (coal) doesnt make sense," he
Natural gas prices are expected
to rise amid increased demand, which should once again spur
exploration, Johnson said. "The (U.S. Energy Information
Administration) predicts a steady rise in natural gas prices,"
With 60 percent of the
countrys gas and liquid pipelines at least half a century
old, replacement needs should also spur demand for line pipe,
according to Johnson.
Domestic mills are particularly
likely to benefit. "A lot of these pipeline companies have a
Buy America philosophy," he said.
However, growing competition
from railroads could pose a threat to the pipe industry.
"We do see railroads increasing
their share of transporting oil," Johnson said, adding that
rail, while still an "expensive option," poses fewer
Environmental opposition has
also slowed work on pipelines such as Calgary, Alberta-based
TransCanada Corp.s Keystone XL, for which Welspun is
supplying some product (
amm.com, Feb. 7). "Our government gets in the way
of us making pipe and you distributing pipe," Johnson said.
Welspun Tubular LLC, a division
of Mumbai, India-based Welspun Corp. Ltd., is in the process of
ramping up its electric-resistance welded (ERW) steel pipe mill
in Little Rock, Ark. (
amm.com, Nov. 21).