Vallourec Star monitors oil price trends

Staff/wire report

YOUNGSTOWN

As oil prices are declining, Vallourec Star, a manufacturer of steel products for the oil and gas industry, is keeping track of the economic trend and its impact on the industry.

“We are looking at oil price trends very cautiously and closely monitoring our customers’ activity. The oil and gas sector is, by nature, cyclical,” the company said in a statement. “We’ve adapted to similar cycles in the past and will adapt according to the evolution of the demand. We are confident in the long-term attractiveness of global oil and gas markets and committed to our strategy of providing the most innovative and competitive tubular solutions.“

The statement comes after one of the company’s competitors announced layoffs.

U.S. Steel said Tuesday it will furlough about 750 employees from two plants that make tubular steel, which is used in oil and gas drilling.

The company said it will shut down a plant in Lorain in March and lay off 614 workers. It said the move is temporary. U.S. Steel also will lay off 142 employees who work at a plant in Houston.

The plants make steel pipes and tubes used in drilling for oil and gas as well as construction. The Pittsburgh company said it is making the moves in response to falling oil prices and unfair competition from foreign companies.

The price of oil has dropped since mid-2014 and is now at its lowest levels in about five years, reducing demand for the pipes and tubes made at the Lorain and Houston plants.

The company stopped work at two tubular steel plants in 2014 and also filed a complaint about unfair competition by foreign companies.

U.S. Steel had about 26,000 employees in North America and 12,500 in Europe at the end of 2013.

Youngstown’s Vallourec Star is a subsidiary of France-based company Vallourec USA. The facility started its production of small- diameter pipe for sales in the U.S. and Canadian markets in October 2012 and created 350 jobs in the Mahoning Valley.

In June 2013, the company had a dedication ceremony for a new seamless pipe mill. The more than $1 billion facility was built to keep up with the demand for small-diameter pipe used in hydraulic fracturing.

Vallourec employs about 700.