United States

United States

The U.S. market for OCTG in 2010 recovered rapidly and grew by more than 45%, exceeding 4.5 million tonnes, according to Preston Pipe & Tube Report. The main component of this significant market growth was the active development of shale deposits in the country’s gas sector, which by the end of 2010 according to some reports pushed the United States into first place in terms of global production of natural gas.

Despite low natural gas prices in 2010 (the average price amounted to U.S.$ 4.52 per 1 mmbtu — million British thermal units), gas companies have succeeded in reducing the breakeven point for most fields and have increased the number of operating rigs. As a result, the number of operating rigs for natural gas production in the United States increased for the year by 14% to 940 units as of December 2010.

Significant growth in oil production activity was also observed. The rise in prices for WTI crude oil has led to increased interest in crude oil in the United States, which is comparable with the level of the early 1990s. As a result, the share of oil rigs in the total number of active drilling rigs increased last year from 34% to 44%. In addition to application at gas fields, horizontal drilling technologies have been successfully introduced at oil shale oil deposits, such as the Bakken in North Dakota, Montana and Saskatchewan, and the Eagle Ford in southern Texas. The number of operating oil rigs in the U.S. increased by 75% over 2010 to 759 units at the end of the year

Amid sustained growth in drilling activity, sales of seamless and welded OCTG by TMK’s American division increased in 2010 by a factor of 2.5 to 595 thousand tonnes, while the market share held by TMK IPSCO rose by 4% in 2010.

TMK increased sales of large diameter pipes more than twofold and has strengthened its stake in the Russian market to 20% compared with 15% in 2009

The market for line pipe in the United States also improved in 2010 in connection with the need for new infrastructure to transport oil and gas from the fields to places of consumption. According to Preston Pipe & Tube Report, the size of the line pipe market in the United States, including imports, reached 1.4 million tonnes last year. Sales of line pipe by TMK’s American division at the same time increased by more than 3 times to 67 thousand tonnes last year.

As before, the capacities of domestic producers do not fully satisfy the demands of the U.S. market for oil and gas pipes. In 2010, the share of imported oil and gas pipes was 47% of the market. In 2010, the introduction of anti-dumping duties ranging from 29.9% to 99.1% and countervailing duties from 10.4% to 15.8% on Chinese-manufactured OCTG increased the potential for sales of pipe manufactured by TMK IPSCO, as well as exports of the Company’s Russian plants.

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