Oversupply of steel pipe in the supply chain ?

An article in the Wall Street Journal (May 1, 2012) describes a plant expansion by Timken in Ohio and a new plant in Texas to be opened by Tianjan Pipe, both focused on steel production for pipe used by the energy sector. But as gas prices fall, prices of steel pipes etc used by the energy industry are leveling off and associated warehouse inventories are increasing. Will the low gas prices impact industry expansion and create a glut of steel pipe, just when new plants are coming online ? Or will the continued high prices for petroleum encourage oil drilling and sustain demand for steel pipe ? Will imports of cheaper steel, discounted by 15 % below US prices, dampen demand for US steel ?

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , , , . Bookmark the permalink.

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