Metal Bulletin Research Strategic Outlook for the OCTG Heat Treatment 2

A Strategic Outlook for the OCTG Heat Treatment, Threading, Coupling and Premium Connection Sectors out to 2020 2. Latin America Actual capacity utilisation (000 tonnes) Figure 36: Actual 2011 threading2011 threading capacity utilisation (000 tonnes) 95% 1000 Real Ouputs (000 tonnes) 1200 90% 85% 800 80% 600 75% 400 70% 200 65% 0 60% Brazil Argentina API Venezuela Premium Colombia Trinidad and Tobago Ecuador Bolivia Average Capacity Utilisation, as of 2011 Source: MBR Source: MBR In terms of threading output, Brazil supplied 47% or 2,181,000 tonnes of the total threaded output in 2011. Most of the output in terms of real weight was API, with premium accounting only for 1.6% or 32,000 tonnes of the total weight. Argentina contributed the most to the market, producing 23,000 tonnes or 64% of the total premium output in Latin America. The average threading capacity utilisation was between 80% and 90%. Notably, Argentina and Venezuela saw the lower rates of utilisation. This was due to poor performance of independent threaders in Argentina and the idle nationalized Venezuelan producer TAVSA. The producer split of production between OCTG and other pipe is based on group strategy, local market demand and industry concentration. Usually the ratio is fairly stable; however, some producers (Tenaris Siderca for example) can act as a swing producer, easily manipulating its output range depending on the demand. In the latter cases plants usually have relatively similar threading and heat treatment capacity at their disposal. 68 See for more information