Steel tube producer Tenaris saw global sales jump 29% sequentially to $1.53 billion in the second quarter of 2021, pushing results up 17% year-over-year. A 21% increase in volumes was aided by a 6% increase in selling prices.
Sales surged by 37% in North America, supported by a continued recovery in energy drilling activity and rising prices during the second quarter. Drilling activity in both the U.S. and Canada gained momentum in the first half of the year and is expected to gain further ground in the second half, though at a slower pace. Drilling activity in the Eastern hemisphere has begun to slowly recover after hitting bottom in Q1, said Tenaris in its quarterly report.
Seamless tube sales rose 23% sequentially to 611,000 metric tons, 37% above sales in Q2 2020. At 79,000 metric tons, welded tube sales were up 10% sequentially but down 27% from a year ago, the company reported.
“The global economy continues to improve, although rates of infection from newer and more infectious COVID-19 variants remain high in many parts of the world,” said the company. “Oil prices have returned to pre-COVID levels as global consumption increases, OPEC+ countries contain production levels and large U.S. shale producers restrain capital spending. Natural gas prices have also risen.”
Tenaris expects its sale to accelerate further in the third quarter, led by North and South America, but tempered by ongoing destocking in the Middle East and a seasonal slowdown in Europe. Net income could reach 20% as pipe prices are expected to follow the continued increase in rig counts and the historic rise of hot rolled coil prices.
The company added 4,000 employees to its payroll worldwide in Q2, including more than 1,000 in the U.S in response to increasing global demand. North America is presently the most dynamic market with sales accelerating faster than in other regions, the company said.
As a result, 700 new hires were added as both Bay City, Texas, and McCarty, Texas, facilities were brought back to full production, while Conroe, Texas, and Koppel, Pa., were reopened. Another 450 new jobs will be added in August to support the ramp up of the seamless mill in Ambridge, Pa., and the finishing facility in Baytown, Texas. The company said it is also advancing with its investments to consolidate the Canadian industrial operations, currently producing premium products in Sault Ste Marie, Ontario.
Despite the ramp-up across the industry, Tenaris expects tubular supplies to be extremely tight into the fourth quarter and potentially beyond.
By David Schollaert, David@SteelMarketUpdate.com
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