Most pipe markets likely to decline in 2001, veteran observer says

According to Douglas Yadon, CEO of Preston Publishing, publisher of the Preston Pipe & Tube Report, year 2001 is expected to bring declines in most pipe producing industries. Yadon presented his comments at an April seminar hosted by SMS Meer.

The data collected from the first few months on 2001 indicates that line pipe and structural pipe are fairly lethargic, mechanical is even worse, and that only one market segment-oil country tubular goods (OCTG)-is healthy.

But something positive also. Line pipe shows promise. According to Yadon, increases in shipments of line pipe usually follow drilling activity by about one year. By his estimates, increased consumption of line pipe was to have started in mid-April. Increased production orders are expected after inventories are depleted.

According to Michael Haught of American Cast Iron Pipe Co, "It's turning for the better". Mr. Haught has already seen the increased activity Yadon has predicted. Haught explained that the one-year delay alluded to by Yadon is due to a method that oil companies use to gain efficiency from line pipe. Rather than developing a single well, oil companies usually develop an area with several wells and transport their combined output through a single pipeline, similar to a tree with many branches connected to one trunk.

Further information can be obtained from:

Preston Publishing
- Attn: LaSondra O'Farrell
- Tel. (409) 750-8800
- Fax. (409) 750-8885
- Email.