Steel Pipe and Tubes

SIC 3317

Companies in this industry

Industry report:

Included in this category are establishments primarily engaged in the production of welded or seamless steel pipe and tubes and heavy riveted steel pipe from purchased materials. Establishments primarily engaged in the production of steel, including steel skelp or steel blanks, tube rounds, or pierced billets, are classified under SIC 3312: Blast Furnaces & Steel Mills.

Industry Snapshot

According to industry statistics from Dun & Bradstreet (D&B), 585 establishments engaged in the production of welded or seamless steel pipe and tubes and heavy riveted steel pipe from purchased materials in 2010. Together these firms generated $2.0 billion in sales and employed 23,581 people. Washington was the most important state in terms of revenue, accounting for $432.7 million, followed by Alabama with $221.8 million, Pennsylvania with $198.0 million, Texas with $193.0 million, and Wisconsin with $169.5 million. Top states in terms of number of employees in the industry were Pennsylvania, Illinois, Texas, California, and Indiana. Other figures from D&B showed that welded pipes and tubes and seamless pipes and tubes each accounted for about 50 percent of the market in 2010.

Background and Development

The U.S. steel mill products industry, which includes steel tubes and pipes, exported $13.4 billion worth of goods in 1995, a 44 percent increase over the 1994 level. Imports of foreign steel pipe and tubes totaled $3.2 billion, an increase of 7.3 percent from 1994. Increased competition from inexpensive steel imports during the late 1990s and early years of the first decade of the 2000s prompted the United States to begin levying tariffs of up to 30 percent on imports from countries such as China, Japan, South Korea, Russia, Brazil, Australia, and members of the European Union as of March 20, 2002.

In 1992, the U.S. International Trade Commission and U.S. Commerce Department ruled in favor of many American pipe and tube manufacturers, concluding that foreign countries were dumping their shipments into the U.S. market at less than the cost of production or values sold at home. The countries guilty of dumping in 1992, which had corresponding duties assessed, were Brazil (103.38 percent); South Korea (4.9 to 11.6 percent); Mexico (32.6 percent); Taiwan (19.5 to 27.7 percent); and Venezuela (52.5 percent).

After some years of declining sales, the U.S. steel pipe and tubes industry entered a period of stronger economic growth in the mid-1990s. Total shipments were $6.3 billion in 1996, up almost 6 percent from the 1994 level of $6 billion. Rising demand, the increasing price of raw material, and energy costs drove the prices of seamless carbon tubing up to $973 per ton, welded tubing up to $739 per ton, seamless carbon casing up to $701 per ton, and welded casing up to $560 per ton. After climbing to $7.5 billion in 2000, largely due to the strength of the U.S. economy in the late 1990s, the value of U.S. steel and pipe industry shipments fell steadily to a low of $5.6 billion in 2003 as a result of domestic economic turmoil, then rose the next year to $7.29 billion.

In the United States, the automotive, display fixture, juvenile furniture, and exercise and recreation equipment industries showed healthy increases in demand for steel pipes and tubes throughout the late 1990s, although demand for these products declined substantially when consumer confidence weakened in the early years of the first decade of the 2000s. Regionally, the Midwestern, mountain, and southern states exhibited high demand, while sales in the Northeast and on the West Coast remained stagnant.

In 2004, the largest steel pipe and tube producing states in descending order were Pennsylvania, Ohio, Illinois, and California, which together shipped 55 percent of total U.S. shipments. New capital expenditures on plant and equipment totaled $166.5 million in 2004, down from $213.9 million in 2002. The cost of materials increased to $4.6 billion in 2004 from $3.7 billion in 2002.

Bill Wolfe, executive director of the Steel Tube Institute of North America, told Myra Pinkham in the September 2006 issue of Metal Center News, "There is a lot of foreign penetration of standard pipe and some issues regarding imported parts using tubing from China, but basically it isn't a bad year."

According to the U.S. Census Bureau, more than 325 establishments operated in this category at the onset of the twenty-first century. Industry-wide employment totaled just over 20,000 workers in 2005 (down from 27,180 in 2000), receiving a payroll of $924.5 million. Within this workforce, 15,266 employees worked in production in 2005, putting in over 34 million hours to earn wages of more than $631 million. Overall shipments for the industry were valued at $9.5 billion in 2005.

According to industry statistics, there were an estimated 652 steel mills engaged in the production of welded or seamless steel pipe and tubes and heavy riveted steel pipe from purchased materials in 2008 valued at more than $3.37 billion. The 406 steel pipe and tubes mills produced an estimated $2 billion in goods. States with the highest concentration were Texas, California, Pennsylvania, Illinois, and Ohio.

The majority of metal fabricators saw the economic climate go from a downturn into a full-scale recession. Among chief concerns were the economy, health care costs, steel prices, availability of skilled labor, foreign competition, materials availability, and high energy costs. "With so many concerns, figuring out how to survive the current economic situation was daunting, and not just for metal fabricators, " Vicki Bell noted in The Fabricator in January 2009, adding 'It's a conundrum that may take many months and even years to solve, but at least the world finally knows what it's dealing with."

Despite the economic downturn, significant industry sectors based on shipped products in 2008 were manufacturers of wrought welded or lock joint tubes valued at $354.4 million; seamless pipes and tubes, which shipped $264.7 million in goods; welded pipe, with shipments of $220.6 million in products; and producers of seamless steel pipes, with contributions of $176.5 million. Total shipments of seamless steel tubes reached $169.5 million. Unfortunately, U.S. shipments of fabricated metal products, including steel pipe and tubes, fell 10.7 percent in February 2009, compared to February 2008, with new orders declining 17.5 percent.

Current Conditions

By 2011, the industry was on its way to recovery, and participants expressed optimism about the future. For example, Synalloy Corp., a South Carolina company that manufactures pipe and piping systems from stainless and carbon steel, told American Metal Market, that it had experienced a 14 percent increase in sales in the second quarter of 2011 as compared to 2010, and that it was "experiencing stronger demand from consumers in the paper and wastewater treatment markets as well the power generation sector." In addition, John P. Surma of U.S. Steel stated in a 28 July 2011 issue of the same journal, "Overall, I think things in [the tubular] sector are moving in the right direction. We're expecting some decent prices across all the product ranges. It is competitive, there are imports, but we think we are going to be able to do pretty well."

Regarding the metal pipe and tube manufacturing industry overall, a 2011 market research report by IBISWorld stated that after experiencing huge fluctuations in revenues from 2005 to 2010, "demand [for metal pipe and tubing] will improve from 2011 to 2016. Rising oil and gas prices and a return to sustained growth in construction activity from 2012 onward will contribute to this growth."

Industry Leaders

One industry leader in the early 2010s was Houston, Texas-based Quanex Building Products Corp., with $798.3 million in sales in 2010. This figure was significantly less than those a few years prior; in both 2006 and 2007, Quanex posted sales of $2 billion. Employment in 2010 totaled 2,109. Ameron International Corp. of Pasadena, California, was also significant, with $503.2 million in 2010 sales and 2,300 employees. In 2011, Oilfield equipment maker National Oilwell Varco had plans to purchase Ameron for $772 million. Other industry leaders included Sandvik Coromant Co. of Fair Lawn, New Jersey, which had sales of almost $900 million and 4,000 employees in 2007, and Marmon/Keystone Corp., a division of Marmon Holdings of Chicago.

Several companies that had been industry leaders in the late twentieth century had disappeared by the early 2010s. Cleveland, Ohio-based LTV Steel Company Inc., for example, led the industry with sales of more than $4.4 billion in 1997. LTV's Steel Tubular Products Co. division, located in Youngstown, Ohio, contributed $300 million to the company's 1998 sales. However, in December of 2002, Maverick Tube Corporation, based in St. Louis, Missouri, acquired the tubular operations of LTV, which had filed for bankruptcy protection, for $120.2 million. In May 2006 Maverick Tube was acquired by Tenaris, a global manufacturer and supplier of tubular products and services. Babcock and Wilcox Co. of Barberton, Ohio, was another former industry leader. It operated as a subsidiary of McDermott International Inc., which generated $2.3 billion in sales for 2003. To gain protection from mounting asbestos-related liability in the early years of the decade, Babcock and Wilcox was forced to file bankruptcy.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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