Tuesday, January 27, 2015YOUNGSTOWN, Ohio -- Vallourec Star is making adjustments to its operations here in the face of plummeting oil prices, the company said Monday.
"In response to the declining oil and gas market, Vallourec Star is developing alternative operating plans and schedules. These plans include flexibility in scheduling production, overtime and contractors. We are also working with suppliers and customers to closely monitor activity," the company said.
"We’ve adapted successfully to similar downturns in the past," the statement continued. "Preservation of our employees and maintaining a properly skilled workforce has always been and will continue to be a focal point in our strategy. Our plans will evolve and adapt as market conditions change."
No further information was provided.
Vallourec manufactures oil country tubular goods, or OCTG, pipe mostly for the oil and gas markets. The company employs about 700 in Youngstown at its plant complex off Martin Luther King Jr. Boulevard, where in 2012 it opened its $1 billion pipe mill to complement existing operations at the site.
Vallourec's announcement Monday came the same day as U.S. Steel Corp. said it would "temporarily adjust operations" at its Lone Star Tubular Operations in Texas and at its Fairfield Tubular Operations and Fairfield Works in Alabama.
"The adjustment in operations is a result of softening market conditions that reflect the cyclical nature of the energy market," U.S. Steel said. "Global influences in the market, like unfair trade and fluctuating oil prices, continue to have an impact on the business."
Two weeks ago Vallourec said it was following the market closely in the wake of U.S. Steel's announcement that it would idle its pipe mill in Lorain, affecting 614 workers, and another operation in Houston that would impact 142 workers. The U.S. Steel layoffs are scheduled to begin March 8 and continue through May, the company said.
Oil prices ended the day trading at $45.15 per barrel Monday, well below the $80-plus per barrel it commanded in mid-November just before the slide began.
With oil prices so low, energy companies lack the incentive to finance new drilling operations, thus reducing demand for drill and casing pipe that Vallourec manufactures.
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