Ferrous Department

Help in the Pipeline?

Steelmakers and their scrap metal suppliers have to take their good news where they can get it, even if it stems from concerns about future energy supplies.

One segment of the metals industry that is seeing a boost is the oil and gas pipe segment, as exploration activity and pipeline projects are enjoying increased attention.

Last year’s Pacific Coast energy crisis coupled with a fossil fuel-friendly administration have jump started orders for large diameter steel pipe, according to Oregon Steel Mills Inc., Portland, one such supplier.

The electric arc furnace (EAF) mini-mill is predicting increased revenues and a return to profitability in late 2001 based on the improved orders from the energy segment.

Any improved demand for scrap from an EAF mill would be welcome from ferrous scrap dealers, as would increased generation of scrap from pipeline and oil exploration contractors.

Thus far, the oil products situation has not been enough to lift scrap markets even regionally, according to one Southwestern U.S. scrap dealer. He notes that demand is still soft and pricing is staying close to its same rut.

"Mexican demand is spotty and Texas mills are running, but not at any great clip," he remarks. The struggles of Mexican steelmakers have been apparent to the border region’s scrap industry. "There were months in the past when we could ship 90% of our ferrous scrap to Mexico, now it’s about 10% going to mills down there."