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Market information
Dr. Gunther Voswinckel, VOSCO GmbH
World Pipe & Tube Market: Current factors in uencing the present situation
Dr. Gunther Voswinckel – Update as per September 2019
In this article, in a consecutive way, several eco- nomic consequences for the tube and pipe industry are discussed.
It must be realized by analysts that forecasts on the oil price level may heavily be overruled by political interventions of the stake holders. Strategical meas- ures consequently are quite demanding. Lean and agile organizations with exible and customer ori- entated production facilities are adequate to prompt the demanding market requirements. Agile digital solutions in the sense of “Industry 4.0” offer further opportunities to stay successful.
The presented gures show, especially US tube and pipe producers took great advantage from the busi- ness trends on the oil and gas market. Particularly the increased pumping and exploration activities in the US are driving forces. If we believe the US experts, this will remain even throughout the year 2019. To a smaller degree in 1st quarter 2019 also Chinese tube and pipe producers participated in this positive trend.
Other tube and pipe markets such as the automo- tive (15 %), mechanical engineering (9 %), building and construction industry (5 %) are also attractive market segments for our industry. Despite actual turbulences, the world automotive market has been characterized by a stable growth. The proportion of tubes and pipes built into cars at the same time is steadily growing, causing increased attractiveness of this market segment.
The mechanical engineering market with its uncounted applications represents many interesting growing segments, such as hydraulic cylinder tubes or ball bearing tubes.
The building and construction industry market is even growing by about 4 %/year. Here we can see a competition between steel/tube structures and concrete elements. Lobbying activities are required, especially to further enlarge the steel/tube penetra- tion for skyscrapers and bridges.
World production of steel tubes and pipes in 1st quarter 2019 showed a new record height of extrap- olated 174.600 tons/year. In detail a growth of +4 %
is reported for the USA, supported by political trade barriers for tubular products and the strong growth of the shale gas exploration.
For welded tubes and pipes below 406 mm diameter, a production increase of +1 % in 1st quarter 2019 was registered. For welded tubes and pipes of 406 mm or larger 1st quarter 2019 production showed a total decrease of -1 %. But USA (+40 %) showed a remarkable production increase. For seamless tubes and pipes 1st quarter 2019 has seen production growth by +1 %. The USA after another booming year 2018 (+17 %) now reports a reduction of -4 %. India with its smaller production capacity reported an increase of +20 %!
This is a remarkable trend, since now for the third time for years, the US tube and pipe production is showing remarkable growth. It seems that the US trade barriers policy is showing its signi cant results.
The pipe prices after an increase of 23 % in 2018 are now declining by 7 % in 1st quarter 2019. Still the overall plant utilization is on a low level.
Demanding high-tech products are the strategic targets rather than commodity-grade tubes and pipes. Limiting factors are sometimes the availabil- ity of steel quality for strip, plate and billets as well as the tube plant infrastructure regarding machines and the applied quality standards.
Finally, the impact of currency exchange rates on the tube and pipe market is discussed. The strong EURO during 2017 and early 2018 was causing export dis- advantages. Since then the Euro is weakening again, being able to compensate some of the disadvan- tages. Anyhow the trade con ict between the US and China is creating an atmosphere with great danger for a global economic recession.
The main and dominant market segment of the steel tube and pipe suppliers is the OCTG industry with 51 % market share. Besides this dominating market the automotive (15 %), mechanical engineering (9 %) and construction industry (5 %) are also strong market segments for the steel tube and pipe suppli- ers (Figure 1).
ITAtube Journal No3/October 2019
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