|
Worldwide production of steel pipe has been on an upward trend for much of the last decade, with the exceptions of 2009 and 2016. Overall production in 2016 was dragged down by the big decrease in large-diameter pipe, 16 in. and larger, but for the most part, production in sizes less than 16 in. OD was stable. For a variety of reasons, 2018 is expected to be a year of improvement.
With the exception of the recent crisis year, 2009, global steel pipe production has moved in one direction over the last 10 years: upward. Regrettably this trend seems to have stopped. After only marginal growth in 2015, output dropped in 2016 by 3 percent to 164 million tons worldwide, according to data collected by the German Steel Tube Association, Düsseldorf, Germany. Although steel pipe production was markedly lower in North America, the CIS, and China, European steel pipe producers did significantly better. Across the EU steel pipe producers increased their output by 4 percent to 14 million tons. In Germany output rose 5 percent over the previous year to 2.6 million tons.
The aforementioned drop outside Europe wasn’t across the board. The decrease mainly concerned seamless and welded large-diameter products, those with outside diameter (OD) greater than 16 inches. In contrast to this, around the world the output of welded products up to 16 in. OD remained steady from 2015 to 2016. Whereas the EU producers succeeded in slightly increasing output in this segment for the third consecutive year, output in the U.S. lagged significantly behind the previous year’s figures.
The association sees the energy industry’s sustained reluctance to invest as the reason for the decrease in output for seamless steel pipes in all regions of the world. The decrease compared to the previous year was particularly pronounced in the U.S. at 20 percent. Compared to this, output of EU producers was only 5 percent lower than in 2015; around the world, the decrease in large-diameter pipe production was 8 percent. Plants in North America and the CIS felt the brunt of the decrease, while EU producers succeeded in increasing their production by 6 percent in 2016 after a very weak 2015.
China Continues Consolidating its Dominant Position
China’s continuously growing dominance in the steel pipe market is hard to overlook. The global record output of 168.8 million tons in 2015 can be attributed almost exclusively to the 11 percent production increase by Chinese manufacturers. With this, China’s share in global steel pipe production rose to 58 percent. This increase resulted especially from the marked increase in production of welded steel pipes smaller than 16 in. OD.
Fracking companies in North America had a particularly bad year in 2015, and many had to discontinue production. Crude oil prices tumbled, falling even lower than they did in late 2008. Because of the resulting crude oil supply glut, the energy industry largely stopped investing. Meanwhile, natural gas prices also continued to drop, which did not help upstream suppliers; sales dropped by more 50 percent.
Solid Demand from Construction and Automotive
One positive trend had to do with raw materials prices, which finally stopped falling. Crude oil prices, which fluctuated between $40 and $50 per barrel in the third quarter, caused exploration activities to stabilize. The rig count in North America continued to go up slightly, although this isn’t to say that the massive investment slump in the energy sector is going to reverse direction any time soon. In contrast to this, other industry sectors continued to show robust demand. According to steel conglomerate Salzgitter AG, demand was particularly high in the construction and automotive sectors.
In Europe, new and ongoing energy projects contributed to the demand for large-diameter pipe. The order intake of the Europipe Group, for example, was substantially higher in 2016 than it was during the first nine months of 2015, mainly because of orders for new pipeline projects such as the Nord Stream Pipeline 2, TAP Offshore, and Zohr Field, and delays in completing the Black Sea pipeline.
In 2016 Salzgitter’s order intake also improved for induction-welded pipes compared with the period under review. Over the first nine months of 2016, the company posted twice the order volume of large-diameter, spiral-welded pipe compared with the same period in 2015. The precision pipe market benefited from activity among Germany’s export-focused luxury automobile manufacturers, whereas the situation in the industrial and energy sector continued to be tight. Weak demand also was posted in the stainless steel sector; by company accounts, the relatively high order volumes of the power plant sector failed to compensate for the weak demand from fields that are directly or indirectly related to oil and gas.
An Improving Forecast
According to estimates of the German Steel Tube Association, the outlook for the steel pipe industry has improved since 2016. It predicts that investment activities in the energy sector, which had practically reached a complete standstill after the crude oil price collapse in 2015, are starting to return to normal. In addition to the resulting backlog, the cyclical upswing in raw material and steel prices should benefit the sector just as much as the continued robust economic activity in the industrialized world. Playing important roles are the relatively favorable energy prices, expansive fiscal policies, and the favorable euro-to-dollar exchange rate. On top of this, the association expects North America’s anticipated expansive economic policies, and an energy policy that puts a stronger focus on fossil fuels, to have a positive effect on the steel pipe industry.
This report was written by the German Steel Tube Association and furnished by Messe Düsseldorf North America.
- The
19th China (Guangzhou ) Int’l tube & pipe Processing Equipment Exhibition
-Tube exhibition, Tube expo,2018 Tube
exhibition,2018 Tube expo, China Tube exhibition, China Tube expo, pipe
exhibition, pipe expo, 2018 pipe exhibition,2018 pipe expo, China pipe
exhibition, China pipe expo, Guangzhou pipe exhibition, Guangzhou tube
exhibition, Guangzhou pipe expo, Guangzhou tube expo
|
