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NW Pipe margins bring mart nearer trade case

Keywords: Tags  pipe, energy, Northwest Pipe, OCTG, oil country tubular goods, Scott Montross, Frank Haflich


LOS ANGELES — Domestic producers of energy tubulars saw weak first-quarter results across the board, and the industry is now a step nearer to filing a trade complaint, according to Scott Montross, president and chief executive officer of Northwest Pipe Co.

The industry has moved "closer to the potential of the trade case now than we were six or seven weeks ago," Montross said during a quarterly earnings call with investors.

Montross described falling margins as a "relatively common theme" for domestic producers, including Vancouver, Wash.-based Northwest Pipe ( amm.com, May 7).

"If you look at where some of our competitors’ earnings were in the first quarter of 2012 versus where they are in the first quarter of 2013, they’re half of what they were," Montross said.

He added that the percentage of producers’ profit margins on tubulars that carry American Petroleum Institute (API) designation fell to a range of 8 to 9 percent from the "mid- to high teens" in the year-ago period.

While Montross noted that imports in some cases have taken 50 percent of the market, he said it doesn’t appear they’ve gained additional share in recent months. Nevertheless, he said, low import prices continue to have a dampening effect on domestic mills’ margins.

But Montross also said that imports are probably here to stay, and trade complaints won’t guarantee profits for domestic producers. "There will always be competition—competition from imports—and we can’t really rely on trade cases to generate the profitability of our business," he said.

Executives at two other producers discussed the possibility of a trade case during their first-quarter earnings calls earlier this month ( amm.com, May 3).


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