The New Era of Magnetic Flux Leakage Testing in OCTG

Edson José Eufrásio and Matt Rutledge dive into the latest developments in Magnetic Flux Leakage (MFL) testing—covering new technologies, evolving standards, and emerging market needs in this discussion titled "A New Era of MFL Testing in OCTG".

Edson José Eufrásio brings over 40 years of experience in NDT, inspection, and quality management across the steel and oil & gas sectors. A former Director of NDT Technology at Vallourec and President of ABENDI, Edson is now consulting for Magnetic Analysis Corporation. He is an ASNT Level III in ET, UT, and MT, with advanced degrees in mechanical and metallurgical engineering and business management.

Matt Rutledge, Vice President of PITCO, LLC, has more than 16 years of experience in OCTG inspection and MFL technology. He has led advancements in inspection reliability and process efficiency, implemented ISO 9001:2015 systems, and continues to drive innovation and quality excellence in the oilfield inspection industry.

Transcript of Video:

We are back again. The small coffee break is over and I would like to

welcome Matthew Rutlitch and Edson Joseio

from the United States. Matthew Rutlitch is the vice president of Pitco

LLC. He has 16 plus years OCTG inspection experience and um he was um

Mark nict flux leakage experience and technology. He has rec he was recognized

for implementation ISO 901 system at the pitco facility advancing inspection and

re reliability and leading technical teams to deliver innovative customer

focused solutions worldwide. Welcome Matthew Rutlitch

and uh his co- co-author is Edson Joseio.

He is a mechanical engineer with an MBH with over 40 years of experience in NDT

inspection quality and large capex projects across steel lamination and oil and gas industries.

He ent former director of entity technology at Valor, past president of

Abendi and current leader of IN global entity consulting specializing in sales

product and development audits and technical assist technical assistance.

Well, you have the floor. All the best.

All right. Thank you very much. I really appreciate that introduction. Let me uh share my screen here and get the

PowerPoint going

again. Yes, thank you for the introduction and uh we are absolutely thrilled to have the opportunity to

address this conference and we are uh and appreciate the past uh several speakers. There was really really good

information. Um, we're going to dig in a little bit into magnetic flux leakage

inspection specifically of uh OCTG products and the advancements that have

been made through the years. Um, before we go there though, I I kind of want to

touch on some things that we've uh seen in the industry and demands from the industry over the past 15 20 years. Um,

as mentioned in some of the previous presentations, the there's been increased demand for the higher grade

materials, the P110s and the Q125s. So, how that translates into our world

is that those grades require more critical inspection. So, you're doing,

I'm sure you're aware, but you're doing a 5% OD and ID inspection on that grade

of pipe. Some other trends that we've have noticed is even the the size of the

notches that are being called out by our customers. Uh API calls out 2-in long,

40,000 wide notches. And we're we're seeing much more interest in oneinch

long, 20,000 wide notches. uh we are seeing callouts for uh oblique

angle flaw detection and I reliable IDOD

discrimination. So we've also seen and and this has been

interesting from the uh processors and the mills uh we're we're seeing uh the

inspection criteria for the P110 being called out on the lower grades. So 5%

IDOD inspections on L80 and N80 and greenpipe. Um so all of these

requirements have really inspired and or pressured I think both come into play uh

the necessity of manufacturers of MFL inspection equipment to make significant

improvements uh over the years in order to make remain relevant to the industry.

So we'll talk a little bit today about uh a few of the example uh examples of

uh the advancements that have been made and flux leakage technology.

Um our first stop will be in the sensor technology. So the legacy equipment and

surprisingly there's still a good bit of it out there but it it focused on wound coil sensors.

uh these sensors have they they provide a reliable inspection but they have some

downsides as well. One of which is when the flux leakage comes off the pipe uh

due to hitting an imperfection uh or called a pertabbation that pertabbation

needs to hit that sensor essentially at a 90 degree angle. it gets uh 10° off

one direction or the other and the amplitude of the signal gets extremely small and so likely you can't perform a

a quality inspection on on that pipe or on those particular imperfections.

There have been advancements in the wand coil technology. One of which was introducing circuit board mounted coils

uh which then gave way to smaller footprints of the coils and smaller

coils so that ultimately you can increase uh channel counts and that

assists in offsetting some of the downside of the coil technology.

Um another sensor technology that's come into play have been hall element

sensors. uh hall element sensors have some unique advantages over the coil

sensors. Uh first off they have a 360 degree sensing area. So that 90°

intersection now becomes opened up a bit. Uh there is also from the hall

elements we get a unique signature uh from from the signal or from the hall

elements and we can utilize that signal for the unique signature for uh better

processing and the software algorithms and all the interpretations of that signal uh utilize that signature. So

there's been there's been great advantages to that that we have seen.

Um next piece we'll move along to is the legacy equipment uh utilized analog

cards. Uh essentially each card you need a card for each function that you needed

to call out on the flux leakage inspection system. And these would have 23 plus cards in them. Uh then software

came along obviously and the software al algorithms replace the cards but more

exciting than that is there are literally hundreds of software algorithms and limitless opportunity for

functions and features and capabilities that you can now present in MFL

inspection equipment. So uh it was really quite an exciting transition uh

for the industry and and for us as well. Um another piece another advantage was

digitizing the signals. So in the legacy equipment the signal is detected by the

sensor. It's analog at that point. That analog signal has to pass through a slip

ring and passing through the slip ring it picks up additional noise and then it

goes along the mill floor over to the computer system the whole way it's

picking up additional noise. So now that signal can end up getting buried in that

noise that it's picking up as it transitions over to the computer.

Whereas if you digitize the signal uh within inches of the source, inches of

the sensor, that digitized signal can bypass the slip rings, be delivered

wirelessly, and then sent along the cables over to the electronics for

further processing. And that whole transition, we haven't picked up any noise at all. So we've got a much

cleaner signal to uh deal with in the software and the algorithms and

ultimately to the display to the operator. So that was a that was a big

change uh for for MFL inspection equipment.

I want to dig a little deeper uh into the software algorithms and the data

processing advancements that have come along the way. Um so in the legacy systems in order to

uh identify an indication a flaw an artificial reference indicator it uses

constant threshold amplitude discrimination. So in short, what that means is during

the calibration process, you're going to calibrate on the smallest flaw that you're looking for, the smallest ARRI.

Then you're going to set that threshold well below the amplitude of that signal.

That poses two potential dilemmas. One of which is false indications. If

the noise generated from the pipe now comes up over that threshold, it's going

to alarm and you're going to have to prove it up. So, the false indications

are an issue there. Um the uh in

addition there's hold on sorry my apologies here.

Oh, there we go. My apologies. I lost a slide on my end. I don't think you did.

Um but additionally that uh that signal

that was picked up ultimately can be lost in that background noise. Whereas

if we when using software algorithms um we can deal much better with that

signal to noise and specifically in lower signal to noise ratios. And we're

going to take a a little closer look at that in the uh in the next slide.

So this is a an actual example that I thought would be useful to uh present uh

the concept here. Um this was a joint of uh seamless pipe. Uh the seamless pipe

had um ridges running longitudinally along the ID surface of the pipe. And

what you can see in the display on the screen is the oscillations there. the

multitude of them correspond with those ridges and the flux leakage coming off

the ID surface of that pipe. You'll also notice that circled in red there is

that's a 5% ID notch and that notch is well below uh the what we're getting

from the longitudinal ridges. So the signal to noise in the raw data before

processing at this point was.56 to one. Essentially on a legacy system

this would be this would be lost. You would not you would not detect this. So the first thing that we do in the in

the software algorithms is we look at the time domain and frequency domain

uh and we then identify the coherent signal components created by the ridges

and we essentially remove those. So by doing that we can now uh display the

actual indication or flaw we're looking for in a much higher signal to a noise

ratio of 1.78 to1. um this as I referenced earlier in the

legacy equipment this notch would have been buried in the noise whereas

applying this software algorithm and this process uh were able to clearly

kick up above it and properly uh send it for uh further inspection by uh by prove

up but you don't have to stop there. So uh

additionally we can look at the individual channels. Uh this particular

shoe that was utilized or sensor I should say had 32 channels. Uh seven of

those channels passed across that 5% ID notch. We could then analyze the data

specifically from those seven channels and verify that they correspond with the

time domain and frequency domains of the calibration and fur at that point we can then

further increase the signal noise ratio from 4.05

to one. So uh essentially from the 5.56 to1 in the raw data uh we have we have

increased the signal noise 7 to one which is which makes puts us puts the

equipment in a position that it's able to properly inspect uh pipe with this

kind of noise generated. Um it allows for a reliable inspection or it greatly

reduces false indications um even in pipe that we've seen here

with the noise envelope exceeding the ID amplitude threshold. So these are some

of the exciting changes certainly not all of them but a few that I wanted to

be able to highlight here. Uh so overall outputs of uh the improvements in MFL

inspection over the years uh repeating on smaller flaws in heavier wall pipe.

It used to be the 9 and 5/8 53 50 lb P110 couldn't run through a flux leakage

unit. Now with these algorithms and changes applied that's not a problem for

the equipment. we're able to provide circumferential data and displays uh

basically so and when it gets to prove up or the operator we're not only

telling them the linear location of the indication but we're also giving them a

0 to 360 location so we can tell them it's at 186°

um really improving the efficiency of the prove up and analysis of that indic

ification. Um, so lots of exciting things that have come out of flux

leakage and continuing R&D uh to bring in more and utilize those al algorithms

further. But at this point, I'm going to pass it along to my colleague Edson uh

for the rest of the presentation. Thank you, Matt.

So guys uh I'm I'm very proud to to take

part of this conference and it's special that we have one dedicated time to speak

about uh magnet flux leakage. I'm very enthusiastic with MFL

uh because uh in 1985 I installed the first bench of the MFL

and for a long long time we didn't see uh uh improvements of and techn new

technology for MFL. uh but in the last years uh the

situation changed drastically and we can see many movement in the way to increase

the MFL performance. uh take some some notes from our uh

colleague from SMS uh with some challenge in terms of quality improvements uh uh operate

skills and uh with the movement that people uh retired and is necessary some

uh training and to transfer these skills in the same way to transfer the skills

necessary to to transfer the knowhow and improve technology.

uh in this way uh we already talk today about many challenges and for uh OCDG

pipe applications day by day we have more demands for a diverse environment

to cover these challenges is necessary to take into account how important to

select the correct method for pipe inspections. We produce good pipes has a

a big technology on boards on these high demand for steel grades but it's

necessary to take into account of the operates uh uh efficiency

do inspections but do inspection the right way. reduce costs for a false

indication that the equipment not well setting or not with state-of-the-art

technology should provocate false indications. Scrap good pipes, approve

bad pipes, increase uh claims and customer insatisfactions.

uh and there is one important it's uh how can we fulfill the specifications

do uh right inspections and selections uh Matt next please.

So in this way I'm consider that the pipe uh inspections all CTG pipe

inspections or other products uh are based in the three pillars

uh to select the right inspections and to check if the your choice is correct.

what's necessary to do in terms of uh inspections but the second pillar is the

pod the probability of of detections of imperfections

API is very clear when they uh when it's it's right that in spite of the

specification criteria the pipe producers uh is responsible to mitigate all

imperfection that they produce independent of the criter material of the specification it pass for this pod

curve that the target is to have near to

the 100% of detectability for the method that you choose for a piping

specification. So it means that the targets 100% of detectability or nearby and the our aim

is to detect the smaller imperfection that's necessary to do the sort pillar

we call defect catalog but it's possible to do any other name but what does it

means in this graph we has a target of the cost efficiency operator that we

must detect our imperfections hide the specifications and to be

triggered. This is our target. But in many case we are working in the other

positions in the other place. uh do over sensitivity to compensate

some problems with the equipment, technology or operating skills that we

lose money and in the other conditions to transfer

the the risk to the customers. This is the bad word. So it means that always we

need to run uh this feedback runs with the our PI producer to be sure that we

are at the target or near to the target. How need to correct our way to be there?

A simple things to use these tools as a defect catalog. If you take part of the

uh pipe order and check which kind of imperfections you are able to detect

which kind of imperfections your equipment is not do a correct run. If we

are focused on these three pillars all the time in the our production or in the

pipe stock yard or when you do inspection before apply the pipes. We

should al realign the the the criteria to focus on these directions.

Next, Mac please. So I put two questions to provocate over

you. How confident we are with the entity method used to inspect other products with matter magnet flux leakage

EU and how to detect irregular imperfections which is a very

complicated morphology for pipe surface. I put some bad pictures when I talk

about the facts. It's always bad pictures but this a practical example

with one imperfections for open the surface and this a real category of MFL

against to the UT we have a good signal good signal triggered by MFL but with a

bad signal for UT why because when the imperfection is regular in the special

in the edge or in the bottom The sound being spread give a very bad

answer to the probe. Oh, I don't talk that one better one method is better than the others. But most of the time is

necessary to combine two methodology or it depends on the application you need

to select the best one. Next M please.

So just to sum up information about magnet magnet flux leakage and neutrine

to put everybody on the same page. Both method of other method has uh uh

limitations and advantage. Utrasonic is very good for volumatic imperfections,

for imperfection in the inside of the wall and for cracks and forh

imperfections with a very wide defined demorphology. But MFL is good for uh uh some

orientations that is very weak for UT.

So thanks for our colleagues like us. We have many improvements for MFL. We I

attend many uh conference worldwide with a lot of papers regard the UT

innovations like phase array like probe improvements algorithm and so on.

But uh we were in the silence for a long long time without any proven for MFL.

Nowadays for the last five or 10 years the situation changed for magnetic flux

leakage and we can see good improvement and this good this improvement is really

align with this graph in terms of the oil and gas global market uh uh increase

and thanks to the speech before this is a right way. So it means that we need we

have a big demand of pipe producer. We have a big demand for pipe inspections.

We do have big demand for pipe suppliers. I need to save money. We need

to select the right inspection method. We need to survey if it works according

to the spec according to the pod and according to trigger the right

imperfection size the right threshold that we can do it

and uh which is strange an opportunity we are facing now. So

customers already recognize how important to define the right method for

inspections. UT for all specifications

requests UT for pipe release in especially for high grade.

But we can I I can I can feel that some customers already change. Consider that

MFL is always important not just for

process control but for pipe release not complete alone sometimes combined with

the G or in two times runs but is necessary to consider

uh entity non-destructive testing for my positions is a very powerful tool

to fulfill specifications, customer satisfactions, but a good feedback for

quality improvement is necessary to have the equipment independent if a request

or not directly communicate with the production flow to react in the short

terms to save pipes during the production line.

And uh I'd like to use this forum as I told you in in the beginning that I'm

very excited with MFL is necessary to to bring this flag in our hands and to push

for MFL to be integrated in the specification demand that's really

necessary to do because we know as we are by producers our equipment ment

suppliers how hard it is to detect natural imperfections with a very

complicated morphology. So UT is very good educ is very good but

MFL is good. uh Pitcoin and MAC shown us

now h how many improvements we can do reducing the background noise reduce

false indications with a very good category mapping the pipe surface through the

pipe lengths that help for production improvement help for the operator in the

proof outline to do a right reparations or to scrap the pipe the right way next

Mac please. So in this way I like to show one

solution from from Mac and Pico uh that combine two techniques together in the

same task bench with MFL and with UT we see two phase array uh that cover in

many directions clockwise counterclockwise lamination wall thickness detections and

oblquity in the same way for MFL but this is just one example it's possible

to consider this rubuska solution that is available in market today or if

necessary we should split this in two separate line for NFL and for UT but

it's necessary to have in our mind how important to have the right equipment

the right method runs and if we have a solutions like what we

show this this for me is the last one but it's possible to discuss and the the

position of us from Mac and from Pico is to have a easy talk with the pipe

reducing demands and with the technology that we should offer to to put in the

very uh easy words uh needs and solution.

Next man please. So just for uh uh to sum up my my my

speech. So we talk about two big companies Mac and Picle that that offer

uh good solutions uh integrated with two different technology. But the most

important things that what what we can offer to you is our experience from Mac

with more than 29 years uh working in the global way for uh NDT solutions for

uh and for educ for flux leakage for UT. We have uh our headquarter in the in New

York and another facility in the Ohio and in Sweden. But we have uh technicals

engineers with a good skills worldwide from a pitical uh and Arctic. We talk

about the one company that start in 1994 with many equipment running in

especially in the USA for pipe producers for pipe yard and

just small uh experience I like to exchange to you.

Uh I I I travel in many many place in the special in the pipe yards.

uh uh sometimes for visits, sometimes for answer claims, that's a bad trip.

But when you look that what happened in the pipeard, pipe, it's a pipe direct supplied that

already inspected and the pepper scraped in the pipeard. Why? Because if the pipe was approved,

if the pipe was well handled, which kind of imperfection we should find in the pipe yard as a a second inspections. But

we then find many many problems. Why? because

some problems with the right decisions of the metal to do a pipe inspections

because in the normal way pipes in the stockyards I would just need to focus to

detect some scratch some imperfections provocate but bad handling but

unfortunately not and when you do this when you do very many pipe rework and

scrap pipe on the pipard we just lose money. So guys, please take this flag

with me and I need to push in this way to have a a strong uh decisions in

specification for which method is necessary to do and the pipe producers

must take care and to analyze daily by day where they are in that uh h floor

catalog shop. Thank you very much.

Yeah, thank you very much uh and and

um and Edson for your interesting presentation. I think Edson, you're

coming from Boristo. Is that correct? Yes. Yes. From Brazil. From Belanch. Yes.

Okay. Please stay online. We will start in several minutes with our uh panel

discussion and uh please stay there and uh well Cornelia will help with the

technical technical start and we will then come and get it done.

Okay.

on the way we could try and pick up some NBC and then after four hours when we've killed one player and then we ultimately

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if I'm an Alcatraz and you die or vice versa it's a real po because you're so far apart it's all Right. Right. I can

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Listen

now. Yeah.

Okay. Amen.

You can get anything. And one better.

Okay. Well, uh, dear colleagues from the Cuban pipe industry, we I would like to

introduce our panel. We have Dr. Hansio Bishna. He is our banker and our I would

say market analyst. We have Azar Mios. He is the CEO of Wellspun in the United

States, one of the best and largest uh pipeline producers. We have Christian

Hakam from SMS. He is responsible for the seamless pipe equipment. And we have

Edson Oasio and Matthew Rudlich from uh

from Mac respectively also from Petco. And I welcome you all for our panel

discussion. And I would go immediately into the questions, the first questions.

And um Saros, maybe I can ask you about the key trends uh which are shaping the

tubular market. We have heard in our presentations quite some of these key

trends. So please can you give us from your perspective in the United States

what are the key key trends shaping the tumor market

somehow we can't hear you maybe at some we can start with you I know you have a

big and large background in in pipe making as well maybe you can tell us

from your perspective what are the key trends in shaping the tubular life.

So uh uh during my professional life uh we always work with uh I always work

with seamless pipes for different applications and uh the the the most important things

is to be uh in touch with the customers in terms of customers demands is

necessary to translate these demands in the practical way. uh during the pipe

productions uh is necessary to to discuss uh the contract reveal in terms

of the specification but in terms of the customer specification as well and uh is

necessary to to take these informations and to transfer this information for uh

working flow. uh the movement that we are facing now uh that the the the the

OCTG market is increasing is uh depends on the each regions but uh in the

general way it's increasing uh when uh when you talk for example in

the South America that we are working for offshore uh in the deeper water the

demand for I I still great uh it's really really big and when I talk about

the offshore we have the sour situations and the big risks uh if some pipe fail.

Uh when I talk about the onshore the situation is not different because we

talk about fracking we talk about the impact in the environment. So uh to to

supply good pipes we need to supply in the safe way.

uh when I talk about the three pillars, it's necessary to not forget about the

most important pillar in terms of the safe conditions, in terms of customer

satisfactions uh is is necessary what I really

strongly recommend when we receive some pipe quotations is necessary to

translate what the customer expectations more than what the specification is

writing. for it's necessary to turn a feedback always do good trainings try to

keep the good skills guys and take all the equipment in state of the art do

this running all the times in terms if you are in good conditions or you need

some reactions the market give us a good gift that is growing and we must take

this fight thank you very much I think thank Well, you you have raised one very

important point in my position that is uh we are having the situation that we

have more uh sulfur SO2 and and more uh

carbon which is very aggressive to the pipes. So we have to have very uh good

lifetimes and very good constraint very good behaviors of the

pipes. Saros, please can you give us give us the your your ideas and your

opinion of the key trends for the tubular market on the line pipe. You mean?

Yes, please. Sure. Uh the the key trends in um in the

US, let me talk stay on to the US which is really the area I see on the

technical side. We we do see a new interest on X80 and X80 steel

grace has been around for a while in comes and goes. Uh not easy to get

availability of X80 steel in the US but there are some pipeline construction

companies that do go to design it in. So from my perspective as pipe producers we

just have to be aware of it. and work with our raw material uh

sources to have this capability which is as I said in the US is not really readily available in the raw material

world. Uh that's one trend I see here. Um

on the technical side of course here on the coating side

all the pipes now require full lining. I think that's relatively new trend in the US. In the past it was sometime sometime

it was not. I don't see any 3 LP needs yet in the US still mostly FB.

Um and also there is demand for I think 24 in CW I think is there's more demand

there we see and that's also part of the reasoning of our investments. Um the also

needs although it's a relatively small market versus a total uh large OD market

is still there is good demand coming for the 08 to 1.5 in thick pipes. So that's

another trend that happening in the US that's the more heavy gauges on the looole.

Um so that's what I see on the market demand still great and technical aspect

for our needs and of course customer specification are tightening u of course

you do we do UT 100% you know hydro 100% these are all now more or less given in

the line pipe uh but customers are open to any type of advanced inspections and

from dimension measurements and other thank you very much s sure

we have talked in or one of the other presentation today have already

mentioned the situation regarding tariffs we all know that there are

terrorists in the US we know that Europe is also protecting itself with

increasing trends towards tariffs so many regions are trying to protect their

own industry by incorporating tariffs. What does this mean in regards

to the competition for between the different companies? You know, there is no no well that that means that more or

less the importers are getting uh closed out of the market and what does it mean

for the competition within the country itself? Uh maybe Saros you can give us.

Yeah, sure. Yeah. from our perspective and I think um I think actions speak better than words. I mean we're

expanding capacity domestic capacity. So obviously we although tariffs

is a short-term impact I mean tariffs are not around forever I think administration but although in the US

there is a protariff uh policy regime for both administration

both republican and democrat for maybe different reasons h but net outcome is

the same I think ts are here to stay for the US and permanent for steel pipe Also

in the US and I come from Europe u it's much easier for domestic producers to

petition or lowcost imports and the administrations all administration act

quickly. So what does it mean for imports? I think if you look at line pipe there was a number which I saw it's

like line pipe imports are down by 50%. If I I saw some statistics I I was not

confident that's why I did not put in my presentation. Uh so effectively what it means that most of us domestic producers

are fully booked let's say now realistically for us for the next two years and there's more

demand out there of course there will be a price um prices will rise domestically

because of course raw material suppliers will also try to increase the profit margin on the API grains both for coil

and plates. So there will be an elevation of price levels for sure which

may allow some imports into the US uh even with tariffs

and and I think to be honest if I were to look at the demand that I see

for the project I have a name and they're very specific with specific timelines there would be a need for

inputs in the US. there just no way that domestic producers can keep up. Uh even

if we all build I mean we we I I mentioned in my presentation that we

building an Elsaw mill we just starting now. Believe it or not we have orders for two months worth of production even

before we even broke ground. This is how good the market is. This is I've never

seen a circumstance like this in my career. Yeah, I think you are really in a unique position though and uh I I do

believe seeing all the project what you have shown to us it will probably be very difficult to serve that all from

local resources only. So there must be some imports and and and some some

I expect there will be imports if I were to guess definitely from Europe from Greece from Germany Europe Corinth will

do imports I expect there will be imports from Korea from Japan I think

there will be imports all around you know at different price levels but there will be I just I think the demand is

exceeds domestic capacity and both raw materials and pipe

and maybe I can add on on's comments a little bit from the more seamless side

and smaller smaller pipe dimensions that that we see it's it's obvious that the

capacity in the US with the equipment levitation that I described is that also

not capable of producing that amount of needs of demand. So import will stick

especially from Asia and in Southeast Asia the price level even with tariffs

on top is still on a not too uh bad level and competitive in the market. So

we will not see inputs fade but surely change in in their in the volumes that

we see from different different regions. And we had to take into account that for

example some exporters from China have let me say special conditions with tax

credits and other uh subsidies so that

they can export to the US even with a tariff of 50% or even more. So uh it's

sometimes not a pure competition which is coming from some Asian countries and

in the medium term we had to take into account that the global over capacities in the steel market in total will rise

to around 750 million tons per year and that will be reached in let me say 2027

2028 yeah I think that's a valid point maybe

where we We have now heard more from the uh pipe producer side. Matthew, maybe

you can tell us a little bit about the position of a equipment supplier. How do you see that situation from the

equipment side? You know, I I think I think the the the main area we're seeing effect is

obviously on the the raw material costs in the manufacturing process. Um we

we've seen that go up. you know, some of my perspective I'd have to draw from the

the first round of the 232 tariffs. I mean, at the end of the day, uh we have

all been through this before and it and it sorted itself out. We during that

period of time we saw an increase of uh manufacturing in the US uh foreign mills

uh building facilities here in the US um growth in processors to process the the

green pipe into into another grade. So, um, if if the original goal of 232 was

to get investment into the US, um, I I do think it accomplished that. Uh, this

round, um, I I I I don't know. We'll have to see how it plays out, but I

would expect to see um some of some of the same. Anyway,

okay. Thank you very much. Well, I would touch another topic. We have already

heard from in one of the other presentation today that the impact of hot world coil pipe and plate price is

really uh has really impact on the profitability of the tube compon

manufacturers. And secondly, we have certainly a situation that the availability of particularly the oil and

gas alloys or the is is is partially very limited and and

the number of uh or people who are interested in supplying the pipe

producers is is also not very big. So how do you see that that situation? Uh

maybe maybe Edson you can answer that from your pipe background how well

seamless it's not so critical because most of the seamless producers are producing the bills by themselves it is

more applicable to to welded pipe producers but but maybe sos can you can

you how do you see that the situation in the US the ail availability of I would

say reasonable coil and plates and secondly the availability of the right

grades steel grades to be used for for the OCDG applications.

Sure. In terms of a reasonable price is did you ask me about reasonable price levels? I I don't know what's defined as

reasonable price level. There will be a market price. Uh it would be a price level set by the

producers. It is a very tight uh it is a sellers market. I mean the the the power

the pricing power is with the steel mills and uh so the pricing power of the

X70 coils like with US steel with Arsenal metal uh SDI US new coil plates

is even more limited. I mean it's all basically the new brand mill which is

still brand new not fully um qualified on everything but they have capacity and

cliffs and that's it. So there is a limited that's why my when I presented I

try to put the risks is really there's limited supply of steel in the US. So I

think we will see plates and calls arriving from Korea from and from Europe

100%. I see that happening with ties. There will be t also from Brazil. I mean because of course the middle some of the

slabs they bring from Brazil. So there will be uh semi-finished or finished arriving in the US with tires and

effectively the price will go higher. There's no question about it. Um in

terms of capabilities for sure the best they're not in the US I mean technical

capabilities that's I as I say I was managing qualif pipworks I don't know the capabilities of dealing plate of

astrome in for male or posco it's higher

so for special applications still would be imported in the US there's no question about it we don't have this

capability domestic loan their raw material pipels I think our mills as good as any I think both on the seamless

and line pipe. Uh but I think raw materials we will need to import raw materials for sure.

That's my view. Thank you very much. I think that's a very clear situation and you know I

remember the times some years ago when the coil coil prices were so high that

even some of the uh welded pipe producers were stopping the operation because they couldn't really get the

margins out of out of the the difference between pipe pipe market price and the

and the coil price that seems to be different nowadays. Well, we certainly have a a sellers sellers situation. That

means the the suppliers of of strip and uh and plate are having an extremely

strong position. But on the other end, the market is so demanding that probably you can also uh justify the adequate

prices on the market for for your pipes. Yes, I think yes, effectively you're

right. prices now it's it's more of an availability issue. Pricing is is yeah

there's not there's no there's always pricing pressure. I don't want to overdo it but uh right now the pressure is on

availability. So who is available to roll pipe in 27 you know Q1 Q2 Q3 that's

to be honest that seems to be more important than the price level the absolute price levels.

I think it's a unique situation and uh in my life in in in in pipe and pipe and

and steel I I do not really remember that we ever had a situation like that

that no I think it's one of your speakers was talking about President Trump but I mean that's really the Trump effect uh even

the financial teams that say that this is the Trump effect on the US pipeline

market that's why this never happened before so it's very unique Yeah, absolutely. Absolutely. Well,

coming to our next topic, we have uh I think particularly Hansen has has told

us a little bit about the the other markets, construction, automotive and uh these markets are also

quite important for for tuban pipe producers because not all pip tube and

pipe producers are in OCDG. Um how how do you see well you have shown us that

construction is is improving? Uh well particularly in the United States we

have a lot of pipes in construction different to to Europe where it is not

so so uh I would say penetration of pipes is not so so large in Asia on the

other hand it's also quite uh uh good the penetration. How do you see the

construction business in in uh well we we know in in the US it's good in in in

Asia it's good but in Europe is relatively so. How do you see that?

Yeah. Uh I expect that we even in Europe will see during the next two three years

an significant improvement in the construction industry. uh even in

Germany because we have uh we need a lot of residential investment very

immediately because the rents are exploding especially in bigger towns and

uh there are a lot of people who need very urgent new housing capacities. Uh

so we will see in Europe even in Europe and significant improvement in the construction sector. The biggest

improvements will be seen in the next decades in the Asian market, not in

China because China had an residential construction during the last decade. But

we don't see in some other developing countries even in India there are high necessities for housing and uh the

biggest housing market in relation to the growth rates will be Africa in the

next uh decade but they starting from a very very low level and in my opinion

they will start also with a very low level of uh residential construction. So

will not provide us with uh the high level construction like they use it

normally in western Europe, Germany or some other countries but Africa will be

very important mainly in the northern part uh naturally Nigeria and Goa as big

oil producers they generate high revenues from the oil production and

South Africa had potential to grow up even its construction sector if we have

a broader look on the construction industry. We have to take into account that also the demand from the power

generation sector will increase very immediately and independent if power

generations built up in Asia and Americas or in Europe. They all need a

lot of tubes and pipes to explain.

Yeah, thank you. That sounds pretty promising despite the fact that I am a

little bit concerned that for example in Europe the lobbying of the pip tube and pipe industry for the construction

business is not on the same level as for example in in in the US. In the US there

is a tremendous lobbying activity uh for tubes and pipes. here in in in Europe.

My impression is that we have a situation that all the big companies like Arsenal and others, they are still

having the largest proportion on on on tea and and and I reviews rather than

rather than on pipes and the the sales people are not so engaged in in

promoting the tubular tubular diet. But maybe this is this is And I want to

add on this the difference when we were talking about especially USA where um

mostly the bond producer was driving that that topic tremendously

he was not part of of such an integrated plant. So cannibalizing his own products

for the sake of pipe was not the need but competing against that and we don't

see that in in Europe a lot because at the end the driving forces are the big integrated steel plants like

no alloy not not anymore but companies that that really are big and they

cannibalizing their own products versus the smaller one is of course a challenging situation of they they will

they are that yeah I think we have to acknowledge that

lobbying is the important factor not only for construction I think also in in

automotive because still we have to acknowledge that tubular applications are for the smaller uh production

volumes applied not for the very big ones and I think

we as the tubular tubular I would say group or tubular industry. We have to

also really promote the benefits of the tubular products not only in

construction but also in automotive because there is big potential that can be taken but uh it it requires

quite some okay what coming to technology uh

Matthew and uh you have you have told us about uh your technologies and I think

also Christian Matthew, what is the what what do you think what are the the technologies which are now really on the

on the machinery side on the techn equipment side what is really driving the industry and gives the opportunities

to become sustainable. Yeah. No, I I I think obviously the the

drivers are are what our customer demands and then ultimately what are the

desires of the the inspection equipment manufacturers. Um you know it's it's exciting to me uh

with with seeing what Mac and us have been have been working on and the

advancements that we've been making. But it can't stop there. um if we stop today

with the the products that are currently offered in MFL like we did years ago

then then here five years from now it's not relevant anymore. So um I I think

continued investment and R&D uh a lot of it is is clearly

softwaredriven right now. We've got we've got whole teams that that's what they do all day long uh are the

softwares and then as I I touched on the sensor technologies and then there's mechanical advancements. So um I I think

there's more to come. I think it's an exciting future for flux leakage certainly and and to at the end of the

day benefit the industry because what as I think Edson kind of talked about a

little bit is um are we are we creating products that uh meet that target area

and that are are safe to go down hole. Uh that's really what it's all about is

the integrity of the pipe when it when it finally gets under pressure. So um no I think it's I think it's it's an

exciting future uh right now for inspection technologies.

How do you see the uh I would say success success path of artificial

intelligence in in finishing and and testing.

Yeah. No I I think artificial intelligent will will absolutely and already is in play. Um, I think there's

opportunities to be seen from the inspection equipment side and and certainly at the mill side as well. Um,

AI is is fantastic at grabbing and analyzing data and coming up with uh

possible solutions to problems. Um, so I think integration in the the machinery

itself uh and into production I I think it's going to it's going to be I I think

that's a real positive direction. I think that's the way it has to go.

Let me add to both questions at the end. Uh one or two comments at the end of

course testing measuring everything that leads to data describing the pipe giving

the genealogology of the pi venment I presented difficult solutions all this

is linked to the requirements that that we heard that the that are tightening

up. So helping the customers on that level technology let you call that

technology is is on the forefront but at the end I guess for all customers

especially for all producers there are a few major drivers at the end it goes to

cost of product which means improvement on yield or like like Edson also was

talking about rejection reduction of rejection rates not improving on on good

and prime products. So to do to to support the customer in improving his

cost base to allow any production possible and and be sustainable on the market and this is on all fronts of of

of the plant important artificial intelligence and measuring and and also

the testing are surely big big players especially when it comes to the product

product quality and characteristics. But looking on the production side, um

tighter tolerances in large large line production on on expanding um better

yield even if it's in in the point percentages of of a seamless production. This is this is big bucks in the the

pocket of producers which they all need to do investments that they are eagerly

uh needing. Thank you very much. I think uh well we

all have to have to acknowledge that uh uh cost our business is cost driven. We

have to see that uh we can somehow get the best out of the production and to

optimize it and uh and to get the best cost cost uh to and the best I would say

value to the customer as well. It's not only cost because you also have to have uh close to smaller lots. It comes to

shorter deliveries and uh as as I would say

Esson has also mentioned uh a lot of lot of defects are occurring on the on the on the yard you know by by by scratching

scratching in transportation. So also the transportation is issue what has to be taken care of and which is quite

sensitive to the quality of the finished product.

We cannot forget one one really major issue especially in North America is energy energy availability.

S mentioned that mentioned that data centers are are

eating up capacity of power. So every watt less in in power usage is helpful.

So energy energy efficiency and energy management becomes the driver of of every producing plant.

I think we will see during the next two decades a different development. We will see an increasing demand from big data

centers for energy and power generation. And on the other hand, we will see a

higher uh energy efficiency in the manufacturing industry. For example, in

the steel production, for example, in the mechanical engineering sector or for example in the automotive industry. And

uh so uh this is the reason why in the OECD count countries the in the member

states the total demand for energy looks relatively stable. But this is a result

from a huge uh change in the industry for energy demand with lower uh demand

per ton steel or per auto per automotive per light vehicle. and on and the other

hand exploiting demand coming from the big data centers.

Thank you very much. Well, finally I would give a little little question to

everybody. Well, we have seen that more or less everybody is saying that the

perspective of uh the tubular industry is is is principle positive

despite regional differences. But uh I would ask maybe the round maybe we start

with uh with Saros how do you see the the future and the outlook for tubes and

pipes on the on the line pipe side? And we have seen we have heard it's bright and and but do how do you see it maybe

also also not only in the states but also you know we have regions like uh

like Middle East we have regions like China we have regions like Europe where we have the need for new uh I would say

pipeline infrastructure and we have also certainly the need for uh re replacing

some of these and maybe also for more durable materials with cladding or

whatever is the discussion there to to to have more sustainable pipelines.

I think the prospects to be honest they feel better that we have felt for the

few years now if you really think back in the last 10 years um there was a time

that things are not looking too good and uh many companies as you know exited the

the space uh right now it's looking good I mean you do have the AI boom is

driving energy consumption AI the data set need 24/7 power

generation capacity. Therefore, that drives gas demand. So, I I for sure see a growth in

in all scenarios regardless of the administration. I see medium-term or even long-term growth. Even if in the US

there is the EIA, which is like the government authority looking for long-term energy demands for the next 30

years, the the gas consumption is definitely increasing. which will drive

line pipe. That's why I'm talking about gas because that really as you know drives uh line pipe and of course

seamless too because basically gas has to come from the ground. Well, OCTG line

pipe it will be driven uh by that. So I see I feel prospects are better than

they have been recently. That that's my feeling. I think Middle East also is on the same path as the US. I mean I think

I didn't mention in my presentation we also building a brand new also mill in Saudi Arabia that's is well span so we

strategically see that as another growth area for for us. Uh so both of those

Europe is more in a more difficult position because of of course the complexity of the um different

administrations and different priorities and of course the rising energy cost and

um open conflicts in the region. So I think Europe is in a trickier position

uh than maybe US and and and Middle East and um Asia is really more of an export

market. So I think the the growth of the domestic industry of the pipe industry there I'm talking about the energy

because of course automotive is big and construction is big that will continues to grow. So in summary I think overall

things are more positive. So I'm sharing Christian's comments on workforce needs,

skill, talent attraction back to this industry which I feel this industry has

been decimated on losing a lot of good talent in in all disciplines electrical engineers, electronic

uh we talked about AI who's going to maintain who is going to program who's

going to use those tools. So to me that is a big challenge for our industry. We

as py producer have to work to

sell the prospects of our industry. Uh explain that it's it's an AI

application. I'm just using some of the what I've heard about AI, the increased use of AI. We have to make our industry

as attractive as it can be for young talent to want to join and have a career

because if you look at the last 30 years, it been very cyclical. So to me that would be and I see that in our

talking wellspan USA which is like a small pilot of this growth. How we

building facilities how do we find enough people to staff the facilities which are well trained and in our case

we're a global company so we can move talent around but this is for me a key priority for us. So we as a tube

association have to do more to to attract young people into our industry.

That's my view. I think the overall the prospects are for now good and also of course I'm not even going to the new energy like CCUs which will come back

and maybe hydrogen. So these are all related to seamless applications OCG and

some form of line pipe for sure. I think that's a valid point. We have to

make our industry more attractive to young talents. I think this is this is really one of the crucial points that at

the moment our industry is not in in the shape that the people think that it is a

positive and a good nice working environment there. Okay, Christian maybe

you tell us a little bit what is your your idea about the uh market outlook for tube pipes from the view of a

equipment supplier.

I have I have surely different different heartbeats at this point for sure and we

have heard that through basically all presentations. The the outlook is is promising. The need is is imminent. We

can see that we know that line is investing heavily in the US in in

Saudi. We see others investing throughout different areas and different regions on on a big level. uh and we

know looking at the landscape and the political situations that especially

especially now for me seamless that different regions require another investment in in a new facility.

Of course on the same note the political situation challenges that as a German equipment supplier tariffs in the US

heavily have impact on such a green field project. So it is also on us to to find new ways of of sourcing,

manufacturing, supply which is also not simple task on that on that that side.

So there is a a connection relationship between all those uh dots that as

promising as it is um and as bright the future may be the challenges become

they come on the way and then some are some are obvious today but some are not and then there's also not yet the

solution ready because you don't know the problem. So um we'll have to have some hurdles to take on the way to get

to especially from an equipment supplier point to get to a point that investments

that so urgently are needed are also easily manageable in the specific

regions without having too much impact by political situations. If it's

tariffs, if it's change of administrations, we had about um approval processes on on pipelines,

similarize it for for for of course plant projects. So different different

challenges that that surely on one side help to to make a big opportunity as

equipment supplier or on the other side this brings will bring new challenges that it is of course we have to take.

Yeah. Well, I I have to say and I think Edson you know that better than me.

Brazil for example is has a situation with tariffs since 40 years and what was

the consequence? the equipment supplier were producing most of the equipment in

Brazil and on the other hand there was certainly a protective situation for for

Manisan respectively later on for Balerk that they had a protective market market

uh so it works out and it is handable from both sides uh Edson what is your

what is your perspective in general on the on the market outlook

Okay. So uh this uh tariff it's a really big impact but I have a feeling that

this is not for for long term because it's uh it's not sustainable for

arguments in terms of market but is related to the to the politics and other

relationship for me it's for period but will be adapt in terms of uh outlook

market for piping tube. Uh so the demand exist

during the day. Uh everybody present the demands for mid long term. What's

necessary is to to keep with innovations with improvements but necessary to to to

have a open mind to adapt and to react in in the very short time.

uh in in terms of uh uh datas uh uh for improvements uh

artificial uh intelligence on board. So guys for my my for my side for

inspections uh when we doing a pipe inspections it depends of the each sectors for OCTG for

automotive or for structural we produce for each pipe a huge amount of data how

to transform this data in informations for process improvements for less cost

for good records so it's not just a case that a pipe is approved or not. There

are many information below to the threshold trigger that's really important for improvements. How should

react with the early informations that we produce right at the first time?

If we can uh take this target, we will survive in the end of any crisis or any

tariff. we be more competitive with this information and transform this for our

side. So uh uh the demanding uh uh for on market exist and demanded for product

with a high performance each time will be more strong and we must be prepared

for this challenge. Thank you very much. Well, I do thank

you all for this vivant and uh very interesting discussion. I hope also our

friends from the and colleagues from the industry they also appreciated our discussion what we had here and I do

thank Zos I do thank Christianio

and for their contribution. Thank you very much and uh looking forward to see you

all and to meet you again and thanks for your all your contribution and again

thanks for all the sponsors for our event today who helped us to be able to

uh organize this event. Thank you very much to all of you. Have a great great day and a great year rest of the year

and I hope we will have a great future for our tular industry and we will keep

it sustainable and we will keep it running because we have good people and

we have to encourage other people to join us in this industry. Thank you very much to all of you.

Thank you. Thank you all. Thank you.

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