Tenaris: Pipe Outlook is Improving

Seamless tube sales rose 17% sequentially to 496,000 metric tons, but were 25% below sales in Q1 2020. Welded tube, at sales of 71,000 MT, plummeted 31% sequentially and 58% from a year ago, the company reported.

“Although the COVID-19 pandemic is still deeply affecting many countries in the world, particularly in Latin America where we have a significant proportion of our operations, the global economic outlook is improving as vaccination programs progress and fiscal stimulus programs are implemented,” said the company in its press release. “Oil prices are stabilizing around $60/bbl and inventories are returning to more normal levels as global consumption is increasing along with industrial production and mobility, while OPEC+ countries continue to contain production levels.”

Sales recovery in the second quarter will be led by North America and other regions in subsequent quarters. Price increases are expected to offset higher raw material costs. Chairman and CEO Paolo Rocca said during the earnings call that if rig counts continue to rise and HRC prices remain at the same or lower levels there will be room for additional price increases for pipe.

Tenaris is preparing for higher North American demand by hiring an additional 1,000 employees at its U.S. facilities. The Sault St. Marie Canadian industrial operations will be consolidated, and Tenaris plans to expand the size range of steel bars at Koppel, Pa., to supply its Bay City, Texas, mill.