CHICAGO PTC Alliance Corp. has decided to idle its steel tube production facility in Hopkinsville, Ky., several sources familiar with the situation told AMM.
PTC Alliance declined repeated requests for comment on the reported closure, but sources said layoffs for the shutdown began on Jan. 31.
The Wexford, Pa.-based company plans to finish existing production orders at the mill by March 31, although that date may push into April, the sources said, adding that customer accounts are expected to be moved to other company plants.
The plant produces seamless tubing as well as drawn-over-mandrel (DOM) tubing, a product that has been struggling in recent quarters because of increased capacity at a number of DOM domestic mills, including PTC (amm.com, July 10
In 2011, for example, PTC announced it had reopened a DOM facility idled since 2004 as part of its plan to expand its DOM tubing capacity (amm.com, Jan. 20, 2011
). At the time, it also said its Hopkinsville plant had recently doubled manufacturing output after returning to full production in late 2010 following a temporary closure in 2009.
But as PTC reportedly looks to reduce its exposure to the domestic DOM market, some sources say it may simultaneously be considering setting up a new oil country tubular goods (OCTG) facility in the United States.
Executives at the company declined to comment on the market speculation, but sources said PTC may have purchased equipment from an idled pipe mill in Croatia, likely the former Commercial Metal Co. (CMC) facility.
Irving, Texas-based CMC sold certain assets of its Croatian pipe mill, formerly known as CMC Sisak d.o.o., to the steelmaking division of Italys Danieli Group for $30.4 million in June 2012 (amm.com, June 4
). CMC also sold some of Sisaks assets not included in the deal with Danieli to an undisclosed third party for $6.65 million (amm.com, June 14
). A CMC spokeswoman declined to comment further on the deal or disclose the name of other buyers when contacted this week by AMM.
A source at Danieli confirmed that Danieli kept the steelmaking and casting assets of the plant as well as a ladle furnace but said CMC sold the pipe-making equipmentincluding both pipe-rolling and cold-processing machineryto an undisclosed German firm. Its from this third-party company that PTC is rumored to be buying the equipment for a possible U.S. OCTG mill.
Sources in the United States and Europe said the former CMC equipment will be dismantleda process which could take several monthsand shipped to North America where it could be used to make OCTG.
Where the equipment might be located once it hits the United States is said to be undecided, with possibilities including Hopkinsville as well as a possible site in Alabama.
An executive at an major OCTG producer with facilities in the United States has been hired to head PTC Alliances OCTG division, one source said, although the company declined to comment. Much like in the DOM market, OCTG capacity is also ramping up domestically, with data compiled by AMM
in late 2012 indicating that more than 3.5 million tons of potential OCTG capacity have been or will be added to the U.S. marketplace (amm.com, Dec. 31
Meanwhile, a number of personnel changes have also taken place at PTC. Mike Chunko, formerly general sales manager of tubing for PTC Alliance, was said to have left the company in or around November 2012, according to several sources.
A spokesman for PTC confirmed that he isnt with the company any longer but declined to comment further.
Hopkinsville plant manager Rob Fornarinno also reportedly left the company in late July, for the Blytheville, Ark., operations of TMK Ipsco, where he is plant manager, according to the TMK Ipsco website.
Christopher Rivituso, London, contributed to this story.