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Seamless margins in OCTG case ‘pretty high’: Vallourec

Keywords: Tags  Vallourec, oil country tubular goods, OCTG, Philippe Crouzet, seamless, India, Thailand, Ukraine fourth quarter 2013

NEW YORK — Domestic seamless oil country tubular goods (OCTG) producers got the better end of the U.S. Commerce Department’s preliminary decision in an anti-dumping case against nine countries, although low margins on some large welded tube manufacturers are expected to pressure overall pricing in the short term, Vallourec SA chairman Philippe Crouzet said during the company’s fourth-quarter earnings conference call.

"Although we are supporting that case, we are not experts in welded tubes and it seems the disappointment is in that particular area. As far as seamless is concerned, the preliminary rates are pretty high," Crouzet said, although he did concede that the zero margin on South Korean OCTG producers (, Feb. 18), which make welded product almost exclusively, "is not favorable to the overall pricing environment in North America."

Indian OCTG producers except for GVN Fuels Ltd. were assessed a 55.2-percent preliminary anti-dumping rate, while Thai producers received 118.32 percent and Ukraine manufacturers 5.31 percent.

Producers in all three countries make mainly seamless OCTG, according to market sources.

Partly as a result of the preliminary determinations, Vallourec was cautious in its outlook for the North American market this year.

"Following the anti-dumping trade case preliminary decision, the pricing environment is likely to remain competitive in the short term," the company said in its fourth-quarter earnings statement.

"We anticipate and target higher volumes but we will continue to see a mix deterioration year on year and we think we will continue to operate in a price environment that is pretty competitive," Crouzet said during the conference call.

The Boulogne-Billancourt, France-based pipe and tube maker posted net income of €85 million ($116.6 million) for the fourth quarter, up 14.9 percent from the same period a year earlier on sales that rose 9.8 percent to €1.61 billion ($2.21 billion), according to its fourth-quarter earnings statement.

Sales volumes stood at 584,000 tonnes for the quarter, 9.2 percent higher than a year earlier, while full-year sales of 2.16 million tonnes were up 3.2 percent.

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