Benteler Group will not pursue the previously announced sale of its Shreveport, Louisiana, seamless steel tube plant to Tenaris, the company said Feb. 6, citing a renewed strengthening of demand in the oil and gas markets that the facility supplies.
“Following the successful ramp-up of the Benteler steel tube plant in Shreveport, the site is now one of the most modern and efficient steel tube plants in North America and can exploit its full potential, especially in view of the strong oil and gas market in the US, which has developed very positively over the past months,” Benteler said in a statement. “The future market perspective by far exceeds previous expectations.”
The Louisiana plant, Benteler Steel & Tube Manufacturing, produces seamless pipe with a rolling capacity of up to 400,000 mt/year. Benteler and Tenaris first announced the potential transaction in July at an initial sale price of $460 million.
The Germany-based Benteler said it now assesses the Shreveport plant “significantly higher than the purchase price agreed with Tenaris in July 2022,” due to stronger market conditions and subsequently chose to “exercise its contractual right to terminate the sale following the expiration of the long stop date, as originally agreed with Tenaris.”
“Together with the employees, the plant management, and the sales organization in Houston, Benteler will further strengthen its position in an excellent market environment by increasing the productivity of the plant and developing the product portfolio in close cooperation with its customers,” the conglomerate added.
Tenaris confirmed the termination of the sale in a separate statement but did not provide further details. The Luxembourg-based global steel pipe and tube producer operates 16 manufacturing and coating facilities in the US, as well as several additional commercial offices and service centers. It produced 2.8 million mt of tubes in 2021, up 17% year on year, according to its annual results.
In 2022, steelmakers with tube manufacturing facilities in the US, including Tenaris and US Steel, consistently pointed to positive outlooks for demand in the key energy markets that they serve.
Platts assessed the monthly US OCTG price for February at $2,700-$3,000/st ex-works, down from $3,000-$3,300/st in January, according to S&P Global Commodity Insights data. The price range has risen, however, since it was assessed at a midpoint of $2,150/st in February 2021.
— Nick Lazzaro
