France-based global manufacturer of pipe and tube Vallourec reported Thursday that North American Q2 sales fell 7 percent compared to Q1 due to lower sales of drill pipes and non-OCTG. However, for the first half of 2012, sales increased 13 percent year-on-year, reflecting the high level of oil and gas activity. As for South America, Q2 sales climbed 25 percent sequentially as a result of higher volume, with a greater proportion of premium pipe sales to the oil and gas industry. Through the first half of 2012, sales were up 16 percent compared to the prior year.
Vallourec also said that the ramp up of its VSB project in Brazil and the new steel mill in the US and is progressing according to schedule. In Youngstown, Ohio, the first billet was successfully pierced on June 29 and the mill is on course to roll the first pipe this autumn.
Additionally, in the second half of the year, sales are anticipated to continue to benefit from the sustained demand in the oil and gas markets. However, for other markets the outlook is unfavorable, notably in Europe and Brazil where most economic indicators have recently been revised downwards, pointing to a lack of the expected recovery.