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NW Pipe seeks more heat-treating capacity

Keywords: Tags  Northwest Pipe, Scott Montross, energy tubulars, heat-treating, OCTG, Thorsten Schier


NEW YORK — Northwest Pipe Co. is looking for more third-party heat-treating capacity in order to move up the value chain in the energy tubulars market, according to its top executive.

"We have our heat-treating done outside by third parties, and it’s been very difficult to get enough heat-treating to take care of what we actually want to supply into the market," president and chief executive officer Scott Montross told AMM.

To overcome the crimp, the Vancouver, Wash.-based pipe and tube producer is developing long-term agreements with third-party processors. "We have relationships with a few different heat-treaters now, all of which are important for us," he said.

Third-party heat-treating costs are expected to decline as capacity, which had been "very, very limited" in the past, is set to rise. "You have a lot of heat-treating now being added by third-party processors. All of a sudden, you might have it done on the outside for a reasonable cost," Montross said.

He declined to comment on rumors that the company also is considering boosting its heat-treating availability through acquisitions, but said that the possibility of the company eventually building its own capacity is "not something that’s completely off the table"

In terms of the market for energy tubulars, rising imports are still a concern and trade cases remain on the industry’s mind.

"The trade cases are getting a harder and harder look all the time," Montross said. "The pricing levels that we are seeing from imports are having a negative impact on the market. When you have both OCTG (oil country tubular goods) and line pipe imports that represent over 50 percent of the market, that’s going to have a dampening effect." Prices for energy tubulars are "continuing their slow march downward" as a result, he added.

In terms of demand, a recent jump in natural gas prices could boost consumption, which has been lackluster so far this year. "With those prices starting to move up, the (drill) rig count starts to expand," Montross said.


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