Page 10 - ITAtube Journal 1-2021

Market information
restarting in 2021 with related positive effects on the demand for line pipes >16”.
Other relevant markets for tubes and pipes (Fig.4 & 5) are not currently experiencing such spectacular volatility but are nonethe- less displaying positive trends.
The automotive market, after a difficult year 2020 with production cuts of about 15-25%, is now recovering in 2021 to pre-pandemic levels. 2022 is even expected to bring a revival of pre-corona growth rates (Fig.5). But major supply chain turbulences are creating a few dark clouds on the horizon. Automotive steel customers within exist-
ing annual frame contracts are for the time being reducing their volumes procured, to an extend that could affect the operation and influence the market. This September 2021 carmakers requested about 30% less steel than in typical months.
The present tendency of large automotive producers such as Ford, General Motors or VW to follow the Tesla model has prompted investments of billions of dollars in electric vehicles and digitalization of cars.
As far as suppliers in our industry are con- cerned, it remains to be seen how the current high prices for tubes and pipes impact the upcoming frame contract negotiations for 2022. It’s possible that price escalation clauses or shorter contract duration times may offer a solution.
The market segment mechanical engineering, representing about 9% of the total tube and pipe market, lost about 12% of its volume
in 2020. 2021 so far has not been able to compensate for such losses, and it’s expected that pre-pandemic levels will only be reached again in 2022. Some investments in mechan- ical engineering products are still delayed due to uncertainties within consequences due to the corona pandemic.
Another attractive market for tube and pipe producers is the civil construction market, representing about 5% of the world tube production. The impact of the pandemic on this market segment was much less severe
in 2020. Some regions, such as the USA, managed to avoid negative growth alto- gether. The construction market is steadily growing along with GDP growth, and it’s expected that 2021 and 2022 will see expan- sion continue at a moderate level of 3-4%.
All market segments nonetheless still
suffer from supply chain challenges, rising costs and reduced availability of qualified manpower. The problems in supply chains, especially from remote Far East sources, have prompted businesses and industries to buy local. Shipping costs are booming as well, and containers represent a serious bottle neck. The USA in consequence forecast an increase in local supply of about 10-12% (approx. 443 billion US$).
ITAtube Journal 2021 – Special Edition
Figure 4: Steel tube and pipe markets Source: ITATube Journal/Wirtschaftsvereinigung Stahlrohr
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Figure 5: Market segment expectations Source: FERI 2/2021