Environment and Energy

U.S. Steel to Restart Lone Star Tubulars Mill

February 5, 2019

U.S. Steel Corp. plans to restart the No. 1 Electric-Weld Pipe Mill at its Lone Star Tubular Operations—a mill that had been “permanently” idled in 2016 due to the challenging conditions for tubular products created by fluctuating oil prices, reduced rig counts and high levels of imports.

“We are encouraged by an improvement in market conditions and an increased customer demand for tubular products that are mined, melted and made in America,” said U.S. Steel President and CEO David B. Burritt.

The mill, in Lone Star, Texas, will provide full-body normalized electric-welded pipe in sizes ranging from 7-16 inch outside diameters for customers across the U.S., including those in the active Permian Basin. “We continue to evaluate all options to align our manufacturing capacity with the growing energy market. Restarting the Lone Star No. 1 Mill will give our customers access to the high-quality electric-welded pipe they expect from U.S. Steel,” said Douglas R. Matthews, Senior Vice President and Interim Head-Tubular.

The Lone Star No. 1 Mill has an annual capacity of approximately 400,000 tons. The restart process will begin immediately and will be completed in early third-quarter 2019, the company said.

While U.S. Steel stands to benefit from tariffs that restrict tubular imports and the Buy American policies of the Trump administration, the timing of the company’s announcement was a surprise to some analysts. Oil prices remain relatively weak and rig counts relatively flat. With other players also adding new capacity, the energy tubulars segment promises to be highly competitive for years to come.