Pittsburgh — Evraz North America is restarting operations at its seamless pipe mill in Pueblo, Colorado, as demand for steel oil country tubular goods has picked up amid the recovery in US drilling activity, a spokesman for the company said April 6.
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Production at the OCTG mill, which serves the western US as part of Evraz's Rocky Mountain Steel operations, is expected to resume in mid-April, Evraz North America spokesman Patrick Waldron said.
"Evraz North America has recalled workers and is in the process of restarting our seamless pipe mill which was idled in May 2020 in wake of the coronavirus pandemic lockdowns, drop in oil prices and overall economic slowdown that hit energy markets hard," he said. "Some workers have already returned and more are coming back in the weeks to come. As energy markets have started to recover, demand for our OCTG pipe products is picking up."
US domestic OCTG prices have moved higher since the start of 2021 following a year of depressed pricing amid the drop in drilling activity.
Prices for US oil country tubular goods rose significantly over the month to April and reached the highest level since September 2018, primarily due to rising replacement costs.
The monthly Platts domestic OCTG assessment stood at a midpoint of $1,400/st April 1, up $200 over March, and up from a low of $775/st during the summer months amid the drop in drilling activity. Prices are for J55 carbon ERW pipe.
The US rig count increased to 519 in the week ended March 31, according to rig data provider Enverus. So far this year, the total oil and gas rig count is up 113, equating to a robust average gain of about nine rigs per week. The count has increased every week save for once in mid-February, when it stood still for a week, before surging by 30.
Compared with the early July nadir, the US rig count is up by 240, or 86%, according to Enverus data.