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.

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