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Nucor sees opportunity in OCTG growth

Keywords: Tags  OCTG, oil country tubular goods, Nucor, first-quarter 2013, John Ferriola, Thorsten Schier


NEW YORK — Nucor Corp. views the growing number of planned domestic oil country tubular goods (OCTG) mills as an "opportunity" for its flat-rolled segment, its top executive said during the company’s first-quarter earnings call.

"We do believe that there’s a significant amount of OCTG coming online. We do believe that that will create an opportunity for our flat-rolled mills, and we are certainly pursuing that very aggressively," president and chief executive officer John Ferriola said April 18.

"We are working with our existing customers and we’re very aggressively working with potential customers to be their supplier," he added.

Ferriola’s comments come at a time of growing OCTG capacity. Luxembourg-based Tenaris SA recently announced that it will build a $1.5-billion, 600,000-tonne-per-year mill in Bay City, Texas, while Paderborn, Germany-based Benteler Steel/Tube GmbH is planning a $900-million OCTG facility in Caddo, La. A number of other players, including Moscow-based United Metallurgical Co. (OMK) and Boulogne-Billancourt, France-based Vallourec SA, are in the process of ramping up new domestic OCTG mills (amm.com, April 12).

As a result of the potential output growth, Charlotte, N.C.-based Nucor has made a number of investments to ready its facilities to supply OCTG makers. For example, it has added a vacuum-tank degasser at its Hickman, Ark., sheet mill.

"The feedback we’re getting from our customers and our potential customers (is) that they also believe we are well-prepared to meet their needs in the future," Ferriola said.

One potential impediment to the industry’s growth, however, is the heavy inflow of foreign OCTG entering the domestic market. Nucor shares the concerns of large pipe and tube manufacturers on this front, Ferriola said.

"That’s a challenge not only for that industry, but for us," Ferriola said. "We are working with that industry to take action to get that corrected."

Pipe and tube producers said in earnings calls late last year that a trade case against Korean OCTG producers, the largest overseas suppliers of the domestic market, was in the works. Some sources said that a filing was "imminent" earlier this year (amm.com, Jan. 16), although that has not materialized yet. Korean mills deny that they are dumping their products in the U.S. market (amm.com, March 19).

Import license applications for OCTG from Korea stood at 69,533 tonnes in March, according to data from the U.S. Department of Commerce’s Import Administration, up from 55,751 tonnes the same month last year.


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