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Tenaris to restart Pennsylvania melt shop, seamless pipe mill

Highlights

Operations idled in March 2020

Company finalizing $15 million investment at Koppel

Pittsburgh — Tenaris US is restarting its melt shop and seamless pipe mill in Pennsylvania amid improved demand for steel pipe and tube products from the energy industry, the company said April 15.

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The company, in a statement, said it was pushing ahead with plans to ramp up its operations across the US, expecting to boost US employment by about 1,000 amid improving demand for its products.

"There are encouraging trends in the market from increases in production and oil prices to total demand," Tenaris US President Luca Zanotti said. "While taking a cautious approach, this presents an opportunity for us to power up our footprint to supply customers through a reliable, domestic value chain."

The Koppel melt shop and the Ambridge seamless pipe mill, which paused operations in late-March 2020 amid weak market conditions spurred by the oil price crash, are central to this strategy, Zanotti said.

Tenaris is finalizing work on a previously announced investment to upgrade its steel bar size capabilities at Koppel and improve safety and automation at the facility. The company has increased the planned investment at the site to include new cranes, the revamping of existing cranes used to feed the furnace with scrap metal, and a new production management system to improve process control at the steel shop, it said.

Work on the total $15 million in projects is expected to be completed in May with production to start up in June, Tenaris said.

The Ambridge seamless pipe mill is scheduled to come back online late summer.

About 250 employees will be recalled or hired for the Pennsylvania mills. The company is also adding employees to its Texas teams at Bay City, Houston and Conroe, as well as its plant in Hickman, Arkansas, it said.

The US rig count has continued to recover so far in 2021 following the mid-April 2020 drop when upstream operators were shedding rigs following a steep oil price drop in early March as the pandemic hit the market. The US oil and gas rig count leaped by 13 on the week to 541, rig data provider Enverus said April 15, boosted by private operators continuing to add vertical rigs in more conventional plays.

With higher rates of drilling activity, US domestic OCTG prices have moved higher since the start of 2021 following a year of depressed pricing amid weak demand.

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. Prices are for J55 carbon ERW pipe.