Oregon Steel Mills Inc., of Portland, began in late June to idle indefinitely its large-diameter pipe mill in Napa, Calif. CEO Jim Declusin says that in this tight steel market, “We do not believe the operating margin opportunities in large-diameter pipe justify the allocation of steel plate from our Portland plate mill for conversion into large-diameter pipe.”

For now, he adds, “The best economic decision for the company is to direct production from the Portland mill to support our plate and coil customers, our structural tubing operation and our Canadian line-pipe business, Camrose Pipe Co.”

Camrose Pipe has two pipe manufacturing mills, a large-diameter mill similar to the Napa plant and an ERW pipe mill, both in Camrose, Alberta. Production at the Napa mill was to be shut down in July. OSM's board of directors also approved a plan to build a spiral weld double submerged arc weld (DSAW) pipe-making facility at or near its Portland steelworks.

The $35 million project consists of two pipe mills with an annual capacity of about 150,000 tons, depending on product mix, capable of producing API-certified large-diameter line pipe from 20 to 60 inches in diameter, with wall thicknesses of between 1/4-inch and 1 inch, in lengths up to 80 feet. The mill should be completed in the fourth quarter of 2005.

Declusin says this decision confirms OSM's commitment to the large-diameter line pipe business, and locating the new mill in Portland will be more cost-effective. The mill will also increase the company's production capability and product offering, now restricted to pipe up to 42 inches in diameter.