Vallourec Star announces 'blackout' at Ohio steel mill

YOUNGSTOWN (Scrap Monster): The steel mill operations at Vallourec Star’s Youngstown, Ohio facility will be idled temporarily for a period of three weeks during mid-February. According to company statement, the decision to idle the operations at the mill is in on account of tumbling oil and gas markets. Incidentally, the mill produces seamless pipes for the oil and gas sector.

The collapsing oil prices have resulted in sharp decline in demand for steel pipes. The company had earlier resorted to several control measures including realignment of production schedule at the mill. The use of contractors was minimized. However, the business condition demanded additional action with respect to operating plans, which ultimately has resulted in its decision to idle mill operations for three weeks. The company report further states that further action, if needed, will be announced based on market conditions.

The company had opened the Ohio mill to cater to the exploding demand for steel tubing from the oil and gas industry. However, the recent fall in oil prices to less than $50 per barrel has forced many drillers to curtail activities across Ohio and rest of the country.

According to Vallourec, the employees at the facility are being offered six-month voluntary layoff. It further clarified that the health insurance coverage will be continued during this period. The Ohio mill employs nearly 500 people.

Vallourec is the world leader in premium tubular solutions primarily serving the energy markets. Vallourec Star, a joint venture between France-based Vallourec and Sumitomo Corp., produces seamless pipes for the oil and gas sector. In addition to Youngstown, the company has operations in Houston and Muskogee, Oklahoma.