US-based steel pipes producer Tenaris has decided to temporarily shut four facilities in the US, including its Baytown plant. Adverse scenarios including a decline in petroleum prices, unprecedented oversupply in the oil market and operational restrictions amid the COVID-19 crisis, led to this move said a company release.
The latest addition to the closure list was the threading plant at Baytown, Houston.
Tenaris plans to restructure its US operations. Two Pennsylvania-based facilities, Koppel and Ambridge along with Brookfield, Ohio and Baytown, Texas will be temporarily closed until the market improves. Tenaris also plans to cut production at other plants to adjust to the low demand situation, as reported by Davis Index.
US oil producers have switched to cash conversion mode following a lull in global oil demand as the virus pandemic has disrupted international trade and significantly reduced air travels and cargo movements. Despite a US-mediated OPEC + deal to cut oil production, benchmark oil prices are far from improving. The benchmark WTI Crude was at $20 per barrel on Tuesday.
Tenaris has an annual capacity to manufacture 8.7mn mt steel pipes. The company’s Koppel plant has an annual capacity to produce over 544,000mt billets through electric mode and the Ambridge facility has a capacity to manufacture around 450,000mt seamless pipes. These facilities along with the Baytown plant was part of Tenaris’ $1.21bn IPSCO Tubulars acquisition entered last year.