Tenaris announced on November 29, 2018 it is reducing production levels at its seamless pipe manufacturing facility in Sault Ste. Marie, Ontario by 25 percent as a result of market challenges. Accordingly, Tenaris anticipates the temporary layoff of approximately 90 union employees as of December 15, 2018. Tenaris communicated with employees and union executives during a town hall today.
The market is challenged by three main factors: a surge in energy tubular imports diverted to Canada by third countries constrained from exporting to the United States due to Section 232 measures; a decline in AlgomaTubes’s export sales to the United States; and, challenges in the national oil and gas market where export bottlenecks are affecting the price Canadian oil and gas customers are receiving for energy production.
“These are difficult decisions that have resulted from high volumes of energy tubular imports, trade actions against Canada that remain unresolved, and Canadian oil and gas producers activity adjustments due to the widening price differential for their energy,” said Guillermo Moreno, President – Canada, Tenaris. “Our production levels remain above those in 2016 when we resumed operations. We are trying, where possible, to reduce the impact to our employees. We remain committed to domestic manufacturing and serving Canada’s energy industry.”
To adjust to the circumstances, Tenaris’s AlgomaTubes facility will suspend operations for three weeks effective December 15, 2018. Operations will resume January 7, 2019.
Tenaris continues to work with industry and governments to defend against steel import surges, and fight for steel access to the U.S. market and get Canada’s energy to market.