US oil country tubular goods (OCTG) and line pipe markets appear set for more volume increases in the first half of the year.
Pipe distributor MRC Global expects growth in its upstream and midstream pipe sectors to support increased production of oil and gas in North America and internationally, according to a 14 February earnings call.
"We are starting off 2023 strong, and the December backlog was 43pc higher than the prior year, and the January 2023 backlog is 3pc higher than December, giving us confidence in our outlook for the year," MRC's chief financial officer Kelly Youngblood said.
Global pipemaker Tenaris expects its North American production will continue to ramp up through the first half of the year and it will increase shipments to pipeline projects, according to a 15 February earnings call.
Tenaris also noted that drilling activity has plateaued in the region entering 2023, and global OCTG demand is expected to reach its highest level since 2014.
At that time, oil prices stood at elevated levels after nearly a five-year period of consistently high increases. Pipeline activity is moving forward in support of oil and gas developments in Argentina and the Middle East, the company noted.
French tubular maker Vallourec expects oil and gas drilling rig counts to remain stable around 750 active rigs. Last week the rig count fell by three to 746.
"There is a deficit of domestic capacity in the US and this will remain the case for the year, and this obviously gives us the opportunity to sustain prices at higher levels than obviously they were two years ago," chief executive Philippe Guillemot said on a 2 March earnings call.
Vallourec will shift the remaining OCTG production at its German plants to its Brazilian facilities by the end of 2023.
The company also signed multiple long-term agreements for OCTG and line pipe products.
Vallourec will supply 16-18in seamless pipes to the project from its Brazilian mills beginning in the first quarter of 2024, and also secured an order from LLOG Exploration Offshore for 25,000 metric tonnes (t) of line pipe for the Salamanca deep water development in the US Gulf of Mexico.
The company also signed a 10-year deal with ExxonMobil Guyana to supply 35,000t of line pipe, including 2,000t of Vallourec's X80 steel grade.
At Tenaris, the company had little to say on the dissolution of its $460mn deal to acquire Benteler North America's 400,000t/yr Shreveport, Louisiana, seamless steel plant.
"We need to adjust and redefine our strategy in North America," Tenaris' chief executive Paola Rocca said in a 16 February earnings call. "We need to strengthen our industrial system, debottleneck some of the value-added process and also increase our capacity of welded product of differentiated welded products. So we will direct our investment in this direction."
US OCTG and line pipe imports continue to move higher, up by 78pc and 50pc, respectively, in January from a year earlier, according to US Department of Commerce data.
OCTG imports may increase by 57pc in February to 241,700t from a year earlier, while line pipe imports may jump by 65pc to 101,800t, according to licenses filed with the Commerce Department.
