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OMK’s OCTG project spurred by bullish view

Keywords: Tags  Vladimir Markin, OMK, Houston, ERW mill, OCTG, Thorsten Schier

NEW YORK — United Metallurgical Co.’s (OMK’s) bullish outlook for the U.S. oil and gas market prompted its $100-million investment in a new oil country tubular goods (OCTG) mill near Houston, president Vladimir Markin told AMM on the eve of the plant’s official opening.

"We have a very positive view on the future development of the oil and gas market here. The market is growing and the consumption of pipes also will grow," he said through an interpreter.

The Moscow-based steelmaker plans to produce 100,000 tonnes of OCTG at the electric-resistance weld (ERW) mill this year, and will mainly look to source coil locally, Markin said.

"We evaluated this market quality-wise and we are very happy with (the) local coil quality, and we (will) work with coils produced locally. If necessary, some supplies from Russia are possible, if it’s viable from an economic point of view," he said.

A number of domestic OCTG mills have come online in recent years and more have been announced, but Markin said he wasn’t concerned about overcapacity as these would likely just displace the large number of imports entering the U.S. market.

"Right now, a lot of OCTG is imported to the United States. And we are sure ... that the imports will decrease but that local producers will be busy with orders," he said.

The new facility’s equipment should also provide OMK with a competitive advantage.

"Our plant is up to date, it is equipped with ... modern equipment, and we don’t fear any competition right now," Markin said, adding that he expects the company’s product to be in high demand.

Markin woukldn’t comment directly on whether the company was concerned about steadily declining OCTG prices, saying only that "we understand the local prices and we can state that we can be competitive here (at current price levels)."

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