Steel Mills
Tenaris: Pipe Outlook is Improving
Written by Sandy Williams
April 29, 2021
Steel tube producer Tenaris saw global sales increase 5% sequentially to $1.18 billion in the first quarter of 2021, but results were still down 33% year-over-year. An 8% increase in volumes was offset by a 5% decrease in selling prices.
Sales jumped 31% in North America as drilling activity picked up during the first quarter. Drilling activity in Canada is subject to seasonality but is currently higher than it was a year ago. Drilling has hit bottom in the Eastern hemisphere, said Tenaris, but is expected to improve later this year.
Seamless tube sales rose 17% sequentially to 496,000 metric tons, but were 25% below sales in Q1 2020. Welded tube, at sales of 71,000 MT, plummeted 31% sequentially and 58% from a year ago, the company reported.
“Although the COVID-19 pandemic is still deeply affecting many countries in the world, particularly in Latin America where we have a significant proportion of our operations, the global economic outlook is improving as vaccination programs progress and fiscal stimulus programs are implemented,” said the company in its press release. “Oil prices are stabilizing around $60/bbl and inventories are returning to more normal levels as global consumption is increasing along with industrial production and mobility, while OPEC+ countries continue to contain production levels.”
Sales recovery in the second quarter will be led by North America and other regions in subsequent quarters. Price increases are expected to offset higher raw material costs. Chairman and CEO Paolo Rocca said during the earnings call that if rig counts continue to rise and HRC prices remain at the same or lower levels there will be room for additional price increases for pipe.
Tenaris is preparing for higher North American demand by hiring an additional 1,000 employees at its U.S. facilities. The Sault St. Marie Canadian industrial operations will be consolidated, and Tenaris plans to expand the size range of steel bars at Koppel, Pa., to supply its Bay City, Texas, mill.
Sandy Williams
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