Sumitomo Metals Expands Capacity for High-End Seamless Pipe Products
07/10/2008 - Sumitomo Metal Industries completes expansion work to add production capacity for high-end seamless pipes, at Steel Tube Works in Amagasaki and Wakayama Steel Works, both part of Sumitomo Metals’ Pipe & Tube Co.
Sumitomo Metal Industries, Ltd. reports that it has completed expansion work to add production capacity for high-end seamless pipes, at Steel Tube Works in Amagasaki and Wakayama Steel Works, both of Sumitomo Metals’ Pipe & Tube Co. Operations restarted at the end of June 2008.
Capacity for seamless pipes has been increased by 100,000 tonnes (9%), particularly for high-margin, distinctive "super" high-end products such as super high-alloy and 13% Cr Oil Country Tubular Goods (OCTG) pipe. The company said the expansions are in line with one of its medium-term business objectives, which is to "accelerate distinctiveness."
The expansion was prompted, in part, by a growing global demand for energy, which caused an increasing demand for seamless pipes used for exploration of oil and natural gas reserves. In addition, in many parts of the world there has been a recent shift of the focus in energy demand from oil to natural gas, due to increasing need to reduce emission of greenhouse gases. Natural gas is usually found in an extremely severe environment for wells—at a few thousand meters below the surface of the ground, that is, much deeper than oil wells, and is often associated with highly corrosive gases.
Responding to customer requirements and those of major oil companies in particular, Sumitomo Metals decided in 2006 to expand capacity for producing high-end seamless pipe for use in those severe environments. This decision led to construction at Steel Tube Works in Amagasaki and Wakayama Steel Works, which has proceeded since then.The expansion was prompted, in part, by a growing global demand for energy, which caused an increasing demand for seamless pipes used for exploration of oil and natural gas reserves. In addition, in many parts of the world there has been a recent shift of the focus in energy demand from oil to natural gas, due to increasing need to reduce emission of greenhouse gases. Natural gas is usually found in an extremely severe environment for wells—at a few thousand meters below the surface of the ground, that is, much deeper than oil wells, and is often associated with highly corrosive gases.
At Wakayama Steel Works, the company pursued a number of measures to improve capacity utilization rate, such as shortening downtime by quicker tooling change for the medium-size seamless pipe & tubemaking plant. The company also increased heat treatment capacity for small-diameter pipes, increased threading capacity, and increased the finishing line’s capacity for 13% Cr OCTG. For the Steel Tube Works (Amagasaki), the finishing line’s capacity for super-high-alloy OCTG was increased. The company invested 35.0 billion yen for the various capacity-expansion projects, which were carried out over a construction period from June 2006 to June 2008.
Looking ahead, Sumitomo Metals and the Vallourec Group have established a joint venture to operate an integrated blast furnace and seamless pipe production in Brazil. From mid-2010 when its facilities start operation, Sumitomo’s global supply capacity from Japan and Brazil (on a combined basis) will reach 1.6 million tonnes of seamless pipe per annum. The company said the increase would allow it to better respond to the requirements of its customers, particularly the oil majors, for high-end seamless pipe.
