NEW YORK PTC Seamless Tube Corp., a subsidiary of PTC Group Holdings Corp., is investing $102 million to establish a seamless oil country tubular goods (OCTG) facility in Hopkinsville, Ky., on the site of its idled mechanical tubular facility, confirming previous reports by AMM.
"PTCs renewed focus on Hopkinsville represents a shift in the companys operations from producing more traditional mechanical tubular products toward producing seamless steel tubes for the energy industry ... which include high-strength tube products used in oil and gas wells and certain other industrial applications," a statement on Kentucky Gov. Steve Beshears website said.
PTC will acquire property adjacent to the site, rework the layout of the facility and install new manufacturing equipment for the upgrade, according to the statement.
Market sources speculated in March that the company had bought equipment from a former Commercial Metal Co. pipe facility in Croatia to set up an OCTG mill after PTC idled the Hopkinsville plant, which at the time made drawn-over-mandrel (DOM) and seamless tubing (amm.com, March 12
The plants previous production went mainly to the automotive industry, but the facility was shuttered because the company had to move its operations closer to its customer base, the statement said.
The company did not return a request for comment on the production capacity of the new 256,000-square-foot plant, which will create 283 jobs and receive up to $12.5 million in tax incentives, according to the statement.
We are very pleased to be returning to Hopkinsville, where we have a long history of working with the community to create meaningful employment opportunities in manufacturing, PTC Group chairman, president and chief executive officer Peter Whiting said in the statement.
The Wexford, Pa.-based company makes DOM, electric-resistance welding (ERW) and cold-drawn seamless tubing from eight facilities mainly in the Midwest, according to its website.
A number of other companies are building seamless OCTG mills in the United States, including Tenaris SA, which is establishing a $1.5 billion facility in Bay City, Texas (amm.com, Feb. 15
), and Benteler Steel/Tube GmbH, which recently broke ground on a $900 million facility at the Port of Caddo-Bossier in Louisiana (amm.com, Aug. 2
One analyst, however, questioned whether the OCTG market would be robust enough to soak up the additional capacity.
Demand has been on the weaker side and thats without the new capacity, Bradford Research Inc. analyst Chuck Bradford said, pointing to the large-diameter line pipe market, where capacity utilization is reportedly low after several new players entered the market over the past few years, as a cautionary tale.
He added that billet supply might become an issue for planned seamless mills that dont have their own steelmaking capacity.
Where are they going to get the steel? Bradford asked. Theres only a few sources for that.