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(AMM) Specialty metals market baffled by lack of moratorium impact

July 30, 2010 - 14:50 GMT Location: PITTSBURGH

KEYWORDS: specialty metals , oil and gas , Gulf of Mexico , moratorium

Specialty metals companies selling their steel and other products into the oil and gas market are stumped as the moratorium on some drilling in the Gulf of Mexico apparently isn't impacting purchasing.

"Despite the moratorium, it appears equipment and crews are being relocated to continue drilling," Dennis Oates, president and chief executive officer at Universal Stainless & Alloy Products Inc., said during his company's second-quarter earnings conference call. "The majors and service companies, along with our customers, are generally positive about (business in) the second half. However, we remain somewhat cautious. The metal supply chain still appears to have excess inventory and the lingering effects of the disaster in the Gulf remain to be seen."

The Obama administration placed a moratorium on deepwater drilling in the Gulf of Mexico on May 28 following the late-April explosion of a BP Plc oil rig that killed 11 workers and leaked oil over a 2,500-square-mile area of water. The ban was overturned by...

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