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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
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
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%
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
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Jan 11
Feb 11
Mar 11
Dec 09
Feb 10
Mar 10
Apr 10
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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
Stainless
Mexico 12,653 +256 +2% Taiwan 1,110 -609 -35%
Line
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
sbb.com/steelevents/shale-tubulars11/
m-o-m change
-100% 100%
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
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Apr 10
May 10
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Aug 10
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Jun 10
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
OCTG - welded
China 6,292 Turkey 2,742
South Korea 4,378 China 2,654
Taiwan 1,498 Taiwan 1,887
Line <16"
China 7,917 China 2,578
India 1,860 United States 2,547
Brazil 938 Argentina 1,952
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
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.
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
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."
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
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Aug 10
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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.
For more informa on, visit:
h p://www.associatedpipeline.com/
Pg. 10 © Steel Business Briefing 2011