Ex-USS Bellville mill to make pipe again

The former U.S. Steel and Lone Star energy tubular mill at Bellville, Texas, is starting up under fresh ownership after a five-year hiatus, potentially adding another 130,000 tons per year of supply to the market.

A newly reestablished Bellville Tube Co. will begin production in the third quarter, the company told Fastmarkets AMM. The facility will start out by producing oil country tubular goods (OCTG) up to 5 1/2 inches in diameter and also small-diameter line pipe.

Structural grades, including rectangles and squares, are “coming soon,” the statement said.

“We intend to start modestly for the remainder of 2019, eventually ramping up to full production of 130,000 tons a year starting in 2020,” the email said. “At that point we project to have up to 100 employees working at the facility.”

The mill will produce J55 and J55-upgradable OCTG and X42 and X52 line pipe, the company said. The substrate will be 85% US-made steel and 15% from Mexico or Canada.

Bellville Tube purchased the facility from U.S. Steel in December 2018. The mill had been idle since 2014, when the Pittsburgh-based steelmaker reduced production of OCTG and line pipe in response to a slump in oil prices, unfairly traded imports and domestic overcapacity.

U.S. Steel had just made significant capital equipment upgrades at Bellville in 2013, including a high-frequency induction welder and ultrasonic inspection equipment. The new Bellville Tube inherited that barely used machinery and is making additional improvements.

“We’ve already begun infrastructure upgrades that will dramatically improve logistical services via truck and railway [and] dual on-site rail spur access,” the company said. “This gives us key access to all North American markets.”

The Bellville mill was part of Lone Star Technologies, which U.S. Steel acquired in 2007. This month, U.S. Steel restarted its Lone Star No. 1 welded pipe mill, which had been idle since 2016 and offers 400,000 tons of annual capacity.

Fastmarkets AMM’s pricing assessment for US domestic J55 casing tumbled to a new range of $1,000-1,100 per ton fob mill on Tuesday June 26, from the previous range of $1,125-1,150 per ton. The price has lost almost $300 per ton since July 2018, after OCTG inventories swelled and overshot demand this year.

The real-estate purchase price for the Bellville mill and subsequent capital investment were not disclosed. The precise ownership mix of Bellville Tube is still evolving and details were unavailable this week, according to a spokesman, who did say that the owners are US-based.

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