Atlas Tube to reduce capacity

SteelOrbis talked today with Atlas Tube CEO Barry Zekelman about the planned structural capacity changes taking place within the company. Mr. Zekelman told us that although in the next several months the company will put up two new lines in Arkansas and one in Chicago, the company's net tube making capacity will actually decrease. The company's new six-inch and sixteen-inch lines planned to come online in November and January, respectively, in Hickman, Arkansas, will not add tonnage to the market, as they are a result of a transfer of tube making operations at the Atlas-owned, Maverick Tube operated facilities to the new Arkansas production lines. The Maverick facilities will no longer manufacture HSS. Also, in January of 2007, Atlas will take out one of its tube mills in Chicago, and put a new one in its place. It will take approximately six months to put up the new line in Chicago. Once that line comes on, the company will remove a second line in Chicago and not replace it. "The net effect will be a reduction in capacity across our North American facilities," Mr. Zekelman told us. "We're going to take a decent amount of tonnage off the market through the first half of 2007. Our goal is to strategically position these assets closer to our customers and to reduce delivery times and freight costs."