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                                                                                 SBB’s Tubulars Market Report     


October 5, 2010
February
March 10,
9, 2011

Top News  SBB Pipe & Tube Trackers 
 
Northwest asks for shareholder suit dismissal  N. America
134
140
Northwest Pipe has petitioned a US investigation. w-o-w: 0
federal court in Tacoma, Washington, to “The applicable law is plain…loss
dismiss a shareholder lawsuit stemming causation requires a disclosure of the 120
from concurrent US Securities and alleged wrongdoing, and not merely of a
Exchange Commission and internal risk that wrongdoing may later be found,”
investigations of its accounting practices. the attorneys write in a February 25 iling. 100
Attorneys representing Northwest Northwest’s investigation into its World
claim that a lawsuit brought by accounting practices began in November 132
shareholders in late 2009 should be 2009. w-o-w: 0
80
dismissed because it fails to identify any It concluded with a restatement of its
wrongdoing on the part of Northwest to earnings since 2005.
manipulate its stock price. The company had previously been
Furthermore, the attorneys note that recording steel costs at the time they were Source: SBB Price Trackers
shareholders cannot claim an economic incurred rather than when the steel
 loss based only on the announcement of an  entered the milling process.            Quote of the Week 

“Virtually  all  the  bills  are 


Webco names new CEO  S&P wary on pipelines 
landowner‐oriented  or 
Effective immediately, former Webco Standard & Poor’s thinks trouble may
Industries CEO F. William Weber has ceded be on the way for natural gas pipeline
oriented  toward  the  local 
the position to Dana Weber, the company’s bondholders. municipality...That’s  the 
COO and president. While S&P continues to view the
Weber will retain his position as industry favorably, recent high‐pro ile goal."  
chairman of the US carbon and specialty accidents are likely to bring increased  
tube maker. David Boyer will move up to regulatory scrutiny and associated costs. Pennsylvania  state  senator  Gene  Yaw  on 
COO. In addition, large new shale plays – several bills introduced to the Senate in the 
“Both of these promotions re lect the particularly the northeastern USA’s past  week  dealing  with  on‐going  water 
tireless efforts and undying commitment of Marcellus shale formation ‐ are located quality  issues  in  the  Marcellus  shale 
these individuals to Webco’s success,” said relatively close to large end markets like forma on. 
Weber. “While I have relinquished the role New York and Washington DC, decreasing
of CEO to Dana, I will continue to serve as the importance of long‐range natural gas Late Breaking News 
the chairman of the board of directors and pipelines to transport gas to once‐key
be involved on a daily basis.” re ineries in the Gulf.
■ OCTG end‐ inishing capacity set to
skyrocket in 2011, early 2012
Editor’s Comment  ■ Global oil and gas activity still
increasing
Down‐hole downstream could be new standard  ■ Hebei irm to commission new plant
All steelmakers since Andrew Carnegie relatively common for tubular producers.
have dreamed of vertical integration. Mills commonly became involved in drill
Usually, that comes down to having string design for their dedicated clients. Contents 
captive raw material sources like scrap, And one notable US steel company even 2 
Regional Reports………………………….         2 
coke and ore. In the US, however, there’s brie ly dabbled in the actual production of
been comparatively little integration in the hydrocarbons and the associated luids,
US Trade……………....…..…..…………...   3  3 
Canada Trade………..…………….…..….        4 

other direction. Most domestic mills are bits and pieces needed to extract them.
happy to sell their steel as‐is to The material needs of the oil and gas NAFTA Industrial…...………….....…....   5  7 
distributors, processors or fabricators with industry are likely to become even more End Use ‐ Oil & Gas……………………...   7  8 

precious few exceptions. complex over time, requiring mills and 10 
Profile ‐  Associated Pipe Line ...…..       
That looks to be changing in the world their customers to dovetail on a number of
of high‐end oil ield pipe. At least two large levels. At some point, it may become hard
tubemakers have announced in the past to tell where the steel company ends and For subscription details see back page, or contact: 

week or so that they’re bringing their the energy company begins. Pittsburgh +1 412 431 4370      Singapore +65 6227 7811 
threading and end‐ inishing operations in‐ London  +44 207 626 0600      São Paulo +55 11 3371 5755 
Shanghai +86 21 5110 5488       Bursa +90  224 234 1523
house or expanding their existing Dan Hilliard, NA Tubulars Editor  

operations. Tubulars Market Report subscriptions@steelbb.com 


  Downstream integration used to be d.hilliard@sbb.com   www.sbb.com 
© Steel Business Briefing 2011       
1
March 9,  2011                                                                                                                                                                             © Steel Business Briefing 2011       
 Global Industry News 
                                                                                 SBB’s Tubulars Market Report     

Latest SBB Spot Prices 
North America      
 
■ Midstream natural gas irm Southcross Energy of Dallas expects to lay over 25 miles
of line pipe – representing almost 5,200 short tons of steel – into the Eagle Ford
shale formation by mid‐2011. The 20‐inch OD line will link gas land being worked
by Swift Energy Co in McMullen County, Texas with a Southcross processing facility
in Gregory, Texas.

■ US carbon and specialty tube maker Webco Industries of Sand Springs, Oklahoma
credits improved volumes and pricing for its year‐on‐year improvement. For the
iscal 2011 second quarter ended January 31, Webco posted net pro it of $5.23m. In
iscal Q2 2010, Webco pro ited just $124,000. Fiscal Q2 2011 sales topped $112m,
up 73.6% from a year ago.

■ TMK Ipsco plans to add a threading line and other end‐ inishing equipment to its
Wilder, Kentucky mill later this year. TMK’s 570,000‐short ton/year Wilder mill
currently sends the 4.5‐16‐inch welded pipe it produces to a separate TMK facility
for threading. The new threading line at Wilder will “result in signi icant savings,
improve ef iciency and modernize our facility,” according to a company
spokeswoman. The company also recently began commissioning of a second
threading line at its Brook ield, Ohio, facility.

■ Stainless pipe makers Marcegaglia USA and Outokumpu raised their transaction
prices effective March 1. Marcegaglia achieved the increase with a base price hike of
unspeci ied amount, while Outokumpu concurrently lowered its base prices and its
functional discount percentage, again by unspeci ied amounts.

Asia

■ Supported by steady demand China’s output of seamless pipes could rise by about
8% this year to reach 27‐28m tonnes. Prices are likely to remain high due to
soaring raw material costs. A recent report from China Metallurgical News (CMN), a
publication of the China Iron & Steel Association (CISA), quotes industry insiders as
saying demand for seamless will rise this year boosted by energy sectors including
rising oil/gas drilling activities and large investments in clean energy (including
hydroelectric and nuclear power).  
 
■ China’s privately‐owned Huludao City Steel Pipe Industrial (Huludao), which
specializes in producing electric resistance welded (ERW) pipes, will commission a
second ERW pipe mill at its Philippines operation in June. The new mill, located in
the Philippines' Clark Special Economic Zone, will produce oil tubular country
goods for export to the North American market. The new mill will be able to roll
ERW in 6~14 inches (168‐355mm) diameter and in thicknesses of 2~11mm.  

Europe  Numbers of the week 
 
■ Marek Mazurek has been appointed the new chief executive of Polish steel pipe
insulator and distributor Izostal. He replaces Wladyslaw Mrzyglod who resigned Vanguard Natural Resources LLC's
from the company last week without giving a reason for his departure. Marek proved reserves jumped 191% in
Mazurek had been Izostal’s inancial director since 2005 and also later became 2010, the Houston‐based E&P company
company vice‐president. reports.

■ Russian steelmaking group Severstal says it envisages a strong 2011, with better El Paso Pipeline Partners LP has agreed
market conditions and increased production and sales volumes, at high prices, to pay $587m to acquire an additional
which should be supported by strong raw materials prices and restocking. 22% interest in Southern Natural Gas
The group increased its revenue by 42% to $13.6bn last year, making $1.43bn Co from El Paso Corp.
pro it from continuing activities, although it made a net loss of $577m.

Pg. 2      © Steel Business Briefing 2011       
Trade Watch US 
 
          US Imports—Feb 2011 (top 15 trading partners m‐o‐m change, metric tonnes)                       

m-o-m change

-100% 100%

Source: Steel Import Monitoring and Analysis System

US Imports by Product (metric tonnes)  Imports plunge 

Import license data show imports fell
23.7% in February, signaling a broad
decline that affected all product
categories except piling.
OCTG lead declines, falling by a third
for the month. Double‐digit declines
were also seen for line, standard,
mechanical, structural, and nonclassi ied.
Although February license data show
pressure tubing imports down 20% in
February, pressure tubing imports in
Nov 2010—Jan 2011 were 50% above
the category’s historical average.
Oct 10
Nov 10
Aug 10
Sep 10

Jan 11
Feb 11
Mar 11
Dec 09

Feb 10
Mar 10
Apr 10
May 10

Jul 10

Dec 10
Jan 10

Jun 10

Pg. 3      © Steel Business Briefing 2011       
Trade Watch US 
 
          US Imports by Product and Country—Feb 2011 (top 5 displayed, m‐o‐m change, metric tonnes)                 
Feb 2010 m-o-m change Feb 2010 m-o-m change
Total 153,845 -63,833 -29% Total 19,508 -7,450 -28%
South Korea 41,058 -17,732 -30% Canada 9,763 -1,765 -15%

Structural
OCTG

Canada 27,473 +3,856 +16% Mexico 6,176 -2,217 -26%


Austria 18,112 +3,642 +25% South Korea 1,104 -2,217 -67%
Japan 10,746 +107 +1% China 489 -837 -63%
Mexico 10,135 -5,337 -34% Japan 376 -64 -15%
Total 104,058 -24,430 -19% Total 8,639 -353 -4%
South Korea 23,442 -27,725 -54% China 1,360 +254 +23%

Stainless
Mexico 12,653 +256 +2% Taiwan 1,110 -609 -35%
Line

Greece 10,367 +10,367 South Korea 1,093 -217 -17%


Japan 10,067 -1,449 -13% Canada 1,016 -452 -31%
Canada 9,015 +1,817 +25% Japan 881 +320 +57%
Total 55,791 -14,636 -21% Total 7,714 -1,949 -20%
Canada 11,908 -5,434 -31% Germany 1,983 +35 +2%
Standard

Pressure
Mexico 8,396 -2,146 -20% China 840 -432 -34%
Thailand 7,354 +7,074 +2531% Russia 741 -555 -43%
Vietnam 3,720 +1,405 +61% Ukraine 577 -502 -47%
India 3,477 -3,239 -48% France 570 +244 +75%
Total 31,803 -6,633 -17% Total 514 +322 +167%
Germany 5,945 +947 +19% Piling Canada 514 +402 +359%
Mechanical

Canada 5,587 -944 -14% China 0 -80 -100%


Mexico 4,086 -1,326 -25% 0K 10K 20K
China 2,403 -589 -20%
Japan 2,056 +748 +57%

0K 50K 100K 150K

Source: Steel Import Monitoring and Analysis System

Highlights  most of any major trading partner.


Line imports from Greece soared to Contraction in South Korea’s line imports
10,367 tonnes, although Greek line accounted for all of the m‐o‐m loss for the
imports have been nonexistent since May product category.
2010. Greek line imports accounted for Turkey is typically a major source of
virtually all of Greece’s imports in OCTG, but license data show no Turkish
February license data. OCTG imports recorded for February.
South Korean imports slumped the

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Shale Play Tubulars


CONFERENCE
May 23-24
Pittsburgh
Pg. 4      © Steel Business Briefing 2011       
Trade Watch Canada 
 
         Canada Feb 2011 Imports (metric tonnes, m‐o‐m changes)                                                  

m-o-m change

-100% 100%

Source: Statistics Canada

Canada Imports by Product (metric tonnes)  Imports flat 
1 year Jan-Feb
Canadian steel pipe & tube imports
40K 12m avg = 28,056 were lat in February as declines in OCTG
OCTG - 22,224 -16,574 -27.2%
seamless imports offset large increases in line pipe
0K imports.
40K 31,129 Imports from Italy surged from
Standard & 12m avg = 25,241 nearly zero in January to 5,144 tonnes in
-3,778 -5.7%
Other Pipe February, primarily due to higher
0K imports of small line pipe.
40K Taiwan likewise posted a large
12m avg = 17,371 18,965
Line >16" +26,308 +226.4% month‐on‐month gain, with increases in
0K Taiwanese imports of standard, OCTG,
16,470 and line pipe.
20K
OCTG - 12m avg = 12,985
-7,128 -17.8%
welded
0K
20K 13,527
12m avg = 12,153
Structural -1,276 -4.5%
0K
20K 15,543
Line <16" 12m avg = 10,176 +3,096 +11.1%
0K
15.. 12m avg = 105,983 117,858
Total +648 +0.3%
0K
Oct 10
Nov 10
Dec 10
Jan 11
Feb 11
Mar 11
Mar 10
Apr 10
May 10

Jul 10
Aug 10
Sep 10
Jun 10

Source: Statistics Canada

Pg. 5     © Steel Business Briefing 2011       
Trade Watch Canada 
 
          Canada Feb 2011 Imports by Product and Country (metric tonnes)                                        
TOTAL 31,129 TOTAL 16,470
Standard & Other Pipe

United States 14,547 United States 7,229

OCTG - welded
China 6,292 Turkey 2,742
South Korea 4,378 China 2,654
Taiwan 1,498 Taiwan 1,887

Thailand 1,070 South Korea 1,100


TOTAL 22,224 TOTAL 15,543
OCTG - seamless

United States 8,179 Italy 4,910

Line <16"
China 7,917 China 2,578
India 1,860 United States 2,547
Brazil 938 Argentina 1,952

South Korea 897 Japan 1,369


TOTAL 18,965 TOTAL 13,527
Japan 15,390 United States 13,404
Structural
Line >16"

Hong Kong 1,212 Japan 64


China 938 Taiwan 30
United States 664 China 26

South Korea 461 United Kingdom 2

0K 10K 20K 30K 40K 0K 10K 20K


Source: Statistics Canada
Canada Imports by Country and Product Group (metric tonnes, m‐o‐m change) 

m-o-m change

-100% 100%

Pg. 6      © Steel Business Briefing 2011       
End Use NAFTA Industrial 
 
                                                                                 SBB’s Tubulars Market Report     

Chrysler plans to build Fiat 500 in Mexico 
Chrysler is investing $550 million to north and the south," said Sergio
upgrade its Toluca plant to manufacture Marchionne, CEO of Chrysler and Fiat.
the Fiat 500 subcompact car for the US The plant upgrade will create 600
market. direct jobs and marks the irst Fiat car to
"Mexico is in an ideal position for be manufactured entirely in Mexico.
Chrysler‐Fiat currently employs 7,000
production of this car because of free trade
workers at its six Mexican plants. Canada’s GDP beats expecta ons 
agreements with neighbors to both the
Canada's GDP rose faster than
NAFTA Quarterly GDP Growth (millions USD, seasonally adjusted)  expected in Q4 2010 on the strength of
2006 2007 2008 2009 2010 rising exports and durable goods
purchases.

+0.8%
GDP grew at a 3.3% annual rate in Q4
2010, exceeding the 3.0% growth foreast
by a Bloomberg survey of economists. On
a non‐annualized basis, the rise
Canada

0%
translates to 0.8% quarterly growth.
Exports increased 4% during the
quarter. Energy exports by volume
surged 17%, as crude oil rose 30% to a
record high.
Business spending on plants and

+0.7%
equipment rose 2.5%, mainly due to a
4.9% growth in investment in
nonresidential structures.
United States

0% Domestic purchases of durable goods


rose 2.9% in Q4 2010 after rising just
0.6% in Q3 2010.
Canadian growth outpaced US
output, which grew at a 2.9% annual rate
in Q4 2010, bogged down by housing and
Source: Federal Reserve Bank of St. Louis weak consumer spending.

US Manufacturers New Orders (millions USD, seasonally adjusted) 
New orders for durable goods rise 

New orders for US durable goods
rose 3.2% in January after declining for
three consecutive months, according to a
March 3 release from the US Commerce
Department.
Transportation equipment showed
the largest rise, a $10.8B or 27.3% rise,
primarily due to a surge in orders for
commercial aircraft.
Orders of nondefense capital goods
excluding aircraft, a barometer of
business investment, fell 6.2% in January
for the largest fall since Jan 2009. The
decline followed two months of
increases.

Pg. 7  Source: US Census Bureau     © Steel Business Briefing 2011       


End Use Oil & Gas 
 
                                                                                 SBB’s Tubulars Market Report     

North American rigs bounce up once again  PA  bill  targets  pooling, 


The North American rig count appears classi ied as miscellaneous, yielding the abandoned mineral rights 
to have rebounded slightly in the latest net gain of eight.

count by petroleum industry consulting By state, Pennsylvania posted the
Courtesy Gas Business Brie ing
irm Baker Hughes. largest individual loss of 11 net rigs,

The US picked up eight rigs for a total followed by Texas with ive.
Two more Pennsylvania Senate bills
of 1,707, or 311 rigs above the equivalent Oklahoma posted the largest net gain
introduced by Senator Gene Yaw target
2010 count. with ive rigs, followed by North Dakota
forced pooling and the abandonment of
During the week ended March 4, the with four. Canada’s rig count increased by
mineral rights in the Marcellus Shale
US gained 18 rigs geared for oil but lost two net rigs for a total of 625, or 82 rigs
play.
seven geared for natural gas and three above the equivalent 2010 count.
The forced pooling bill, SB 447,
  Rig Count by Country: Oil / Gas split (Updated March 4, 2011)  focuses on the pooling of "holdout"
2 years 3/4 w-o-w change companies, not landowners, who hold
acreage in land units held by other
970 8 companies, Yaw tells Gas Business
1000 899
Brie ing.
Gas
-7 -0.8%
"I've been told that 90% of the
801 pooling issues are inter‐company issues,
US

rather than between landowners and


500 8 companies," Yaw says. "This statute
+18 +2.3% addresses that."
Oil

260
Yaw says company‐to‐company
pooling also will reduce the
447 environmental impact of drilling because
it will minimize the amount of well sites.
Gas

400 -19 -9.7%


SB 445 deals with the abandonment
1
of mineral rights. If the owner of mineral
Canada

210 rights hasn't exercised within 21 years


200 184 his or her rights, or iled papers to
177 +21 +4.9% continue their claim, the rights would go
Oil

4
to the surface owner.
0 "We're not looking to take anything
away from anyone," Yaw says.
2009 2010 2011
"We're inding a fair number of
Source: Baker-Hughes situations where someone transferred
property rights 100 years ago but
    Rig Count by US State (w‐o‐w change, updated March 4, 2011) 
retained mineral rights," Yaw tells GBB.
w-o-w % change "It's buried in the middle of a deed and,
100 years later, the owners don't know
-10% 10% whether they have an interest."

Source: Baker Hughes

Pg. 8      © Steel Business Briefing 2011       
End Use  Oil & Gas cont. 
 
         Canada Rig Count  by Province (m‐o‐m change, updated March 4, 2011)                                       
w-o-w % change
Quebec recommends shale moratorium 
British Columbia  
55 (-7) -10% 10%
Saskatchewan The Quebec minister of sustainable
79 (+1) development, environment and parks will
Alberta appoint a commission to study shale gas
468 (+8) exploration and production in the Canadi‐
an province as he considers recommen‐
Manitoba
dations to halt much of the local activity
20 (+0)
in the industry to wait for more analysis.
In a report made public late Tuesday,
a Quebec government bureau recom‐
mended the formation of the commission
and also stopping all hydrofracturing not
related to a scienti ic study.
Shale gas exploration that did not
involve hydrofracturing could continue
should Minister Pierre Arcand ban the
practice pending further study, under the
recommendations.
Map data © OpenStreetMap (and) contributors, CC-BY-SA.
Arcand said, that he would appoint
Source:  Baker Hughes   such a commission and weigh other ele‐
NYMEX Henry Hub Natural Gas 1‐month contract  ments in the report, which he received in
February.
$5.00 March 9, 2011
$3.93
NYMEX WTI Crude Oil 1‐month contract 
12m avg = $4.18
$4.00

Source: Energy Information Administration


Oct 10
Nov 10
May 10

Jul 10

Sep 10

Dec 10

Feb 11
Mar 11
Feb 10
Mar 10
Apr 10

Aug 10

Jan 11
Jun 10

Pg. 9      © Steel Business Briefing 2011       
 Industry Profile 
                                                                                 SBB’s Tubulars Market Report     

Associated Pipe Line Contractors  A brief history of   
What is it? Associated Pipe Line 
APLC is a Houston, Texas, based firm specializing in pipeline construction and service. It
currently operates more than 25,000 miles of pipeline in 43 states and 27 countries. Contractors 

What does the company do?
The company is divided into several main operating divisions: the land division, which handles
site surveys, construction cost estimating and actual installation of land‐based pipelines; the
marine division, which handles the installation of shallow‐water underwater pipelines; the Arctic
division, which handled much of the end construction stages of the trans‐Alaska pipeline system
in the late 1970s; the rehabilitation and special service division, which handles pipeline pigging,
rehabilitation and other services; and a construction support division, which builds associated 2011 Has currently completed 
air strips, camps and other support structures. more than 25,000 miles of 
pipeline 
Who are some of the company’s major clients?
APLC’s client list includes major energy players like El Paso Natural Gas, Chevron Pipe Line
Company and Shell Pipe Line Corporation, as well as diversified companies like Dow Chemical
Company and Airco Cryoplants Inc.

Why is it interesting?
1989 Purchases Tulsa‐
■ APLC has completed pipelines ranging from 4‐48 inches in diameter. Houston, Inc

■ The company is responsible for over 12,000 miles of land‐based pipelines alone.

■ The firm is currently involved in four major pipeline projects in four US states, totalling
almost 400 miles of pipeline.

1958 Changes name to
Associated Pipe Line
Contractors, Inc,
acquired by J Ray
  McDermott
 

1956 Reorganized as Sharman,
Allen, Gay & Taylor, Inc.

1946 Founded in Texas


as Associated
Contractors and
Engineers, Inc

For more informa on, visit:  
h p://www.associatedpipeline.com/  

APLC workers lowering a section of line pipe into place

Pg. 10      © Steel Business Briefing 2011