Question-and-Answer Session
Operator
Thank you. We will now begin the question-and-answer portion of the today’s conference call. (Operator Instructions). Our first question comes from Ryan Connors. Your line is open.
Ryan Connors
Good morning and congratulations Brian and Stephanie to you and your colleagues on your success.
Brian Dunham
Thank you.
Stephanie Welty
Thanks.
Ryan Connors
I guess, Brian, you made some comments about Tubular margins. But I guess, if we can just sort of drill down that a little bit. Obviously, 26% I think is the gross margin that’s impressive I think in that business where it’s usually low teens, I guess. So, really just trying to get a better handle around how sustainable that is? And in particular, I mean was there anything going on in the quarter from an inventory perspective that didn’t cause that or contributed to that in terms of lower cost of fuel going through the P&L or anything of that nature?
Brian Dunham
Well, I think all of that obviously always contributes. I don’t think it was extraordinary in this case. In other words, we didn’t have an extraordinary amount of inventory at the beginning of the quarter that we flushed through. But certainly, if we are doing an effective job of monitoring the price increases in steel, and those increases are falling through the market, you have an opportunity to have some gains on inventory to have on hand.
So, as you look forward and you see price is moderate, I think it would be unrealistic to think we are going to replicate or improve upon that particular margin number as a percentage as we go forward. But we do think volume is going to continually be strong and we do think, we will continue to see pretty good margins in the second half of the year.
Ryan Connors
Okay. That’s great. Then I guess just kind of from a bigger picture perspective then on that Tubular Products business. You’ve talked in the past about margin goal for that segment being somewhere in the mid-teens. Can you just kind of reset us on your long-term thinking in terms of that business unit? Is that sort of still the long-term run rate type of goal, or is this kind of change you are thinking at all in terms of improving your outlook there?
Brian Dunham
I think there are some things that have happened, Ryan, that may change that outlook. And I rather than trying to give you a new target, let me just enumerate a couple of things. Obviously, the ITC ruling on Chinese product has an impact. There is a lot of product that was coming in from China, that is not coming in anymore, and won’t for some time. And I think that’s going to have an impact long term on prices of the certain segment of our business. Not having much of an impact so far, because we are really not focused on that segment right now. And that’s because of another change that has happened. The energy market of course is very strong, and we are really focusing most of our available capacity into the line pipe arena what where we’ve had a presence for the last few years, but that market is very, very strong right now.
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