TPT July 2007

From the AmericaS

With its Lone Star purchase, US Steel aims to become leading North American provider United States Steel Corp plans to buy Lone Star Technologies, the Dallas, Texas-based maker of welded pipe for oilfield applications, to create North America’s largest producer of tubular steel. The Pittsburgh-based steel giant said that it intends to combine its largely seamless tubular business with Lone Star’s welded tubular operation, broadening the USS line of products for the energy industry. On completion of the $2.1 billion cash purchase, at a premium of about 39 per cent over Lone Star’s closing share price on March 29, US Steel will be able to produce about 2.8 million tons of tubular steel per year in North America, the company said. John P Surma, US Steel’s chief executive, said the transaction represented ‘a compelling strategic opportunity’ that significantly expands the company’s tubular product offerings, production capacity, and geographic footprint. The deal was expected to close by the end of the third quarter. US Steel is looking for a prompt benefit in the form of higher profit in 2007, excluding certain accounting adjustments related to inventory. US Steel also enlist two Korean partners to enhance its position at home To build a presence in what it sees as a rapidly growing large- diameter linepipe market in North America, US Steel Corp

announced on April 4 that it would form a joint venture for a new spiral-weld facility with two South Korean companies. These companies are Posco, the leading steel producer in that republic, and SeAH Steel Corp, a tubular products manufacturer. The site is adjacent to existing USS-Posco Industries (UPI) facilities in Pittsburg, California – not to be confused with US Steel’s headquarters city of Pittsburgh, Pennsylvania. The joint venture – United Spiral Pipe LLC – will design, engineer and build of mills capable of producing 300,000 net tons per year of spiral-welded tubular products in the range 24" to 64" in diameter. High-quality hot rolled coil will be supplied to the mill by both US Steel and Posco, with the newly formed company responsible for marketing the output. US Steel and Posco will each hold a 35 per cent interest; SeAH, 30 per cent. Investment will total approximately $93 million, with profits to be shared by the partners proportional to their stakes. The facility is expected to begin production in 2008. For Posco, the spiral-weld venture represents a new phase in its relationship with US Steel. Through UPI, the two companies have been partners for more than 20 years. US Steel chairman and chief executive officer John P Surma said that the newcomer, SeAH, will contribute its expertise in producing and marketing spiral welded tubular products. • On April 24, US Steel reported that first-quarter profit rose 6.6 per cent on strong growth in its European operations. Flat-rolled and tubular segments declined, but results for the

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J uly /A ugust 2007