Oct. 17, 2006 — Service center and distributor inventory reductions have prompted Ipsco Inc. to adjust its plate and pipe production and steel purchases, rather than attempt to push additional tonnage in to the distribution sector.

Despite the move, Ipsco expects fourth quarter shipments to remain relatively flat compared to the third quarter.

Ipsco has been operating most of its facilities near capacity — and service centers and distributors built up their inventories — during an extended robust market. Ipsco says the production scale-back will allow it to better realign its own inventory and accelerate planned maintenance programs. Where appropriate, the reductions will be accomplished by the use of statutory holidays and vacations.

Ipsco expects to report third quarter earnings above the high end of previously issued guidance of $3.30 to $3.50.

Ipsco operates steel mills at three locations and pipe mills at six locations in Canada and the United States. As a low-cost North American steel producer, Ipsco has a combined annual steelmaking capacity of 3,500,000 tons and provides further processing at its five cut-to-length lines located in both the United States and Canada. The company's tubular facilities produce a wide range of tubular products including line pipe, oil and gas well casing and tubing, standard pipe and hollow structurals.