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 its 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 thats completely off the table"
In terms of the market for
energy tubulars, rising imports are still a concern and trade
cases remain on the industrys 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, thats 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