Page 15 - ITAtube Journal 2/2019

Figure 19: World Steel Tube and Pipe Production Welded > 406 mm (ktons) Source: ITATube Journal/Wirtschaftsvereinigung Stahlrohre e.V.
and the euro gained about 21% in 2017. In 2018 the euro lost twice as much against the yuan (-22%) compared to the loss against the US dollar in the same year, encouraging imports into China. Then in 2019, the euro regained 13% against the Chinese yuan, with the result that the overall exchange rates EUR/USD/CYN are once again at the levels of early 2017. Market watchers should keep a close eye here on how the trade con ict between the US and China develops and to what extent this is re ected in the relevant
exchange rates. There can be little doubt that the exchange rates of these lead currencies do impact the international trade and chal- lenge our industry as well.
What measures are pipe produc- ers and plant equipment suppliers taking to overcome current dif - culties and to generate sustaina- ble business?
The global increase in tube and pipe demand is leading to region- ally improved plant utilization in the steel tube industry. Some pipe producing companies in the USA are even reactivating obsolete
Market information
average world pipe-producing plant utilization is at a very low level of only about 30%.
This political signal seems to have had the desired effect on US pipe production The 2018 production gures (Fig.20) re ect this impres- sively, showing that only US tube and pipe producers have been able to increase their production by 19%. All other countries/regions reduced their production, with the most signi cant losses in China (-15%) and Japan (-7%). Europe (-2%), CIS and ROW (-1%) show more moderate production decline.
This trend re ects the decreased demand for pipelines in these regions and political measures, such as recent import duties, taken by the US legislation. Some of the technologically advanced producers of large diameter line pipe tubes can still succeed on their unique selling points.
In this entire scenario, currency exchange rates have also had a notable impact on the trading of international pipe and pipe pro- duction equipment throughout the world.
In 2017 the euro (EUR) gained about 20% against the US dollar (USD). (Fig.21) In the months since April 2018, it fell again by about 10%, down to 1.13 in October 2018. This does, of course, lessen pressure on exports into the US.
Since early 2019, the exchange rate of the euro to the US dollar has stabilized at a rate of 1.13. It remains to be seen how and if the Brexit confusion and the Euro- pean parliamentary elections will in uence developments in the course of this year.
The exchange rate of the euro to the Chinese yuan (CYN) developed parallel to that of the US dollar
Figure 18: Regional Steel Tube and Pipe Production Welded < 406 mm (ktons) Source: ITATube Journal/Wirtschaftsvereinigung Stahlrohre e.V.
ITAtube Journal No2/May 2019
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