Like the whole global economy, the market for steel tubes features relative equilibrium
STEEL TUBES
STEEL TUBES
Like the whole global economy, the market for steel
tubes features relative equilibrium
UKRAINE
By the results of the 8 months of 1999, production of
Ukrainian steel tubes keeps on lagging behind the last year’s level.
Production
According to MetallurgProm, in the 8 months of 1999,
production of steel tubes by 6 major plants of Ukraine accounted for some 761 ths. tons,
which is 71% against the respective period of 1998. In August 1999, production amounted to
104 ths. tons of tubes, which is roughly 98% of the July’s level. This evidences a
definite production stability at the enterprises.
However, average monthly output of steel tubes reached only
95.1 ths. tons versus 126.1 ths. tons in 1998 and 150.7 ths. tons in 1997 (see table 1).
Table 1. Production of steel tubes by Ukrainian
plants
|
Enterprise |
Total for |
Total for |
Total for |
Total for |
Percentage |
| Dnepropetrovsk Tube Plant |
195.2 |
214 |
98 |
140-145 |
12.9 |
| Komintern Metallurgic Works of Dnepropetrovsk |
139.8 |
102 |
44 |
60-70 |
5.8 |
| Lugansk Tube Plant |
65.9 |
63 |
17 |
26-30 |
2.2 |
| Ilyich Iron & Steel Works of Mariupol |
58.9 |
62 |
26 |
36-40 |
3.4 |
| Nizhnedneprovsk Tube Rolling Plant |
436.9 |
468 |
252 |
380-390 |
33.1 |
| Nikopol YuzhnoTrubny Plant |
273.8 |
286 |
144 |
210-220 |
18.9 |
| Novomoskovsk Tube Plant |
177.9 |
117 |
53 |
75-80 |
7.0 |
| Khartsyzsk Tube Plant |
459.9 |
201 |
127 |
190-200 |
16.7 |
| Total production |
17-1,175 |
.0 |
|||
| Average monthly output, ths. tons |
150.7 |
126.1 |
95.1 |
93.1-97.9 |
Traditionally, the leading manufacturer is Nizhnedneprovsk
Tube Rolling Plant with 33.1% of the total output in Ukraine, subsequently followed by
Nikopol YuzhnoTrubny Plant (a 18.9%) and Khartsyzsk Tube Plant (a 16.7%).
According to the forecasts, basing on the results of
plants’ operation in the 8 months of 1999, production of steel tubes in 1999 will amount
to approximately 1,117-1,175 ths. tons, which corresponds to 73.8-77.7% of the last
year’s level.
Exports
In January-August 1999, Ukrainian export of steel tubes
accounted for 493.7 ths. tons. Should such tempos of supplies be retained in the present
year, exports can reach the level equivalent to 91.2% of the last year’s respective
figure. During this period, seamless tubes contributed 63.3% to the total export of tubes
as compared to 57.8% in the year of 1998, large-diameter welded tubes – 15.3% as
compared to 18.5%, and other welded tubes – 21.4% as compared to 23.7%.
Analysis of monthly export of Ukrainian steel tubes in 1998
and in the 8 months of 1999 witnesses that, in June-August 1999, export of tubes had a
tendency for increase (see figure 1). While in January-July 1998, average monthly exports
accounted for some 78.9 ths. tons and in August-December – 51.9 ths. tons, in the first
half-year of 1999, this indicator reached the level of 50 ths. tons and, in July-August,
it increased to 85.5 ths. tons.
Fig. 1. Export of steel tubes from Ukraine in
1998-99
The largest export supplies of steel tubes were forwarded
to the CIS countries – 65.9%, Asian countries – 13.6%, EU states – 13.5%, Eastern
European countries – 3.3%, and the Baltic States – 2.3% (see table 2). It should be
mentioned that by the results of 8 months, the portion of exports to the CIS increased,
and those of exports to Asia and the EU plummeted as compared to the first half-year of
1999.
Table 2. Ukrainian export of steel tubes in
1997-1999, ths. tons
|
Region |
Seamless |
Large-diameter |
Other |
||||||
|
1997 |
1998 |
1999 (Jan-Aug) |
1997 |
1998 |
1999 (Jan-Aug) |
1997 |
1998 |
1999 (Jan-Aug) |
|
| CIS |
472.1 |
284.7 |
171.400 |
452.90 |
148.00 |
70.400 |
279.4 |
170.80 |
83.8 |
|
Incl. RF |
329.4 |
195.2 |
140.400 |
353.30 |
89.80 |
33.600 |
173.7 |
109.00 |
59.6 |
| Baltic States |
20.3 |
7.5 |
5.300 |
2.80 |
1.40 |
1.600 |
10.4 |
9.30 |
4.4 |
| Western Europe |
75.8 |
92.3 |
56.100 |
5.00 |
0.20 |
0.004 |
2.4 |
2.40 |
10.4 |
|
Incl. EU |
66.5 |
91.1 |
56.100 |
5.00 |
0.01 |
0.004 |
2.4 |
2.40 |
10.4 |
| Eastern Europe |
17.4 |
23.9 |
12.600 |
0.04 |
0.20 |
0.800 |
3.7 |
1.80 |
3.1 |
| North America |
4.1 |
5.4 |
1.900 |
0.00 |
0.00 |
0.000 |
1.2 |
5.50 |
0.5 |
| South America |
0.4 |
0.1 |
0.600 |
0.00 |
0.00 |
0.000 |
0.0 |
0.00 |
0.0 |
| Africa |
5.3 |
8.7 |
3.600 |
0.00 |
0.00 |
0.000 |
2.0 |
0.07 |
0.0 |
| Asia |
30.5 |
45.6 |
60.900 |
0.05 |
0.50 |
2.900 |
0.8 |
2.30 |
3.4 |
| Australia and Oceania |
0.0 |
0.0 |
0.005 |
0.00 |
0.00 |
0.000 |
0.0 |
0.00 |
0.0 |
| Total |
626.8 |
468.6 |
312.400 |
461.00 |
150.50 |
75.700 |
299.9 |
192.40 |
105.6 |
| Average monthly exports, ths. tons |
52.2 |
39.1 |
39.100 |
38.40 |
12.50 |
9.500 |
24.9 |
16.00 |
13.2 |
In January-June 1999, export of Ukrainian tubes accounted
for some USD 184.5 mln. With the existing tempos of currency inflow, the total annual
amount of currency earnings will amount to nearly 61% of the 1998’ level. Export of
seamless tubes contributed the largest portion of 64.5%, large diameter welded tubes
contributed 21.1%, and other welded tubes – 14.4%.
Seamless tubes
In the 8 months of 1999, Russia holds the leading position
by the volume of imported tubes of this type (140.4 ths. tons), which is approximately
44.9% of the total Ukrainian export of seamless tubes and nearly 89.4% of the volume
registered in the respective 1998’ period (see figure 2). Besides, it is noteworthy that
average monthly export supplies from Ukraine exceeded the best indicator of the last year
by nearly 5.6%.
Fig. 2. Export of steel tubes from Ukraine to Russia
in 1998-99
The subsequent positions are occupied by Turkey (34.3 ths.
tons), Italy (31.2 ths. tons) and Germany (22.9 ths. tons), as well as Israel (13.6 ths.
tons). In the present year, should the existing tempos be retained, supplies of seamless
tubes to the EU countries can reach the level of 92% vis-a-vis the 1998’ level. It is
worth mentioning a significant increase in export of tubes to Turkey, because in the 8
months of 1999, the last year’s level was exceeded as high as nearly 3 times. Supplies
of tubes to Israel feature advancing tempos: the level of supplies in the 8 months of the
present year accounted for nearly 96% of the total 1998’ level. Supplies of seamless
tubes to Turkmenistan and Uzbekistan decreased respectively as low as 5.0 and 2.4 times
compared to the year of 1998.
Large-diameter welded tubes
Compared to the last year, the situation on this market is
still turning for the worse for Ukraine. In the 8 months of 1999, exports accounted for
only 75.7 ths. tons against 150.5 ths. tons last year. Out of the total large-diameter
welded tubes exported from Ukraine, the largest portions were shipped to Russia (44.3%)
and Uzbekistan (37.4%). Besides, while Uzbekistan was consuming these tubes quite
steadily, Russia increased its purchases only in the few last months. Probably, this was
influenced by the increase in prices for oil and oil products.
The low of supplies to Russia was registered in January
(0.2 ths. tons) and high – in July (9.4 ths. tons). Such a situation was stipulated with
both the financial standing of Russian consumers and their willingness to use
domestically-made products. However, they prefer to purchase large-diameter tubes from
Western business partners.
Other welded tubes
Out of the total amount of 105.6 ths. tons of exported
other welded tubes, nearly 79.4% were destined to the CIS member-countries, including some
56.4% imported by Russia. However, against the last year, this volume is equivalent to
only 82%. Nevertheless, in the present year, monthly exports to Russia gradually soared
from 1.6 to 14.2 ths. tons (see figure 2). Other regions consuming Ukrainian welded tubes
are the EU countries with 9.8% and Asia with 3.2%. The largest EU consumers included
Greece (3.9 ths. tons) and Ireland (2.6 ths. tons). Ukrainian-made other welded tubes are
still not supplied to the countries of Africa and South America and just nominally entered
the North American market (0.5 ths. tons). Against the last year, the most dramatic
decrease in export of other welded tubes was observed in supplies to Belarus (6.9 ths.
tons) and Uzbekistan (7.7 ths. tons).
Imports
In the 8 months of 1999, Ukraine imported some 10.5 ths.
tons of tubes worth approximately USD 7.9 mln. The portion of HR seamless tubes reached
75.2% (86.3% in terms of currency earnings), of other welded tubes – respectively 19.0%
and 11.0%, and of large-diameter welded tubes – 5.8% and 2.7%.
Seamless tubes were predominantly shipped from Russia
(61%), Austria (11.1%) and Poland (9.9%). Large-diameter welded tubes were mainly imported
from Russia (64.6%) and Germany (8.6%); and other welded tubes – from Russia (84.7%) and
Germany (2.8%).
Ukrainian tubes: conclusions and outlooks
Summarizing the data on production, exports and imports of
steel tubes in January-June 1999, as well as in 1997-98 (see table 3), one can make a
conclusion on a rather steady negative trend on the Ukrainian market for steel tubes.
Table 3. Ukrainian market for steel tubes in 1997-99, ths.
tons
|
Parameter |
1997 |
1998 |
1999 (Jan-Aug) |
1999 (forecast) |
| Production |
1,808.3 |
1,513.0 |
761.0 |
1,100-1,175 |
| Exports |
1,387.7 |
811.5 |
493.7 |
800-850 |
| Interior supplies |
420.6 |
701.5 |
259.9 |
300-325 |
| Imports |
— |
18.0 |
10.5 |
14-18 |
| Total domestic consumption |
— |
719.5 |
270.4 |
314-343 |
The results of the first half-year of 1999 evidence that
with the existing production tempos, in 1999, Ukrainian tube plants will manufacture
nearly 1.1-1.2 mln. tons of tubes, which is 73-79% of the 1998’ level. In the recent
months, export of steel tubes has had a tendency for increase, with the decrease in
interior consumption. Taking into consideration the current situation in the economy of
Ukraine and the CIS countries, as well as the tendencies of the global economy, and
especially considering recovery of prices for oil, one should suppose that until the end
of 1999, the situation on the world market for steel tubes will have a positive tendency.
Antidumping against Ukrainian seamless tubes
Starting from August 19, 1999, the European Commission has
imposed a preliminary 56.5% antidumping duty on export supplies of certain types of
Ukrainian seamless tubes to the EU countries for the 6-month term (Regulation of the EU
Commission No.1802/1999 of August 17, 1999).
According to the Commission, the key reason for this lies
in the fact that average sale price for Ukrainian seamless tubes in supplies to the EU
countries accounted for ECU/MT 370-380 (USD/MT 392.5 – 422) against ECU/MT 620-670
(USD/MT 657-735) for the EU-made seamless tubes. Besides, portion of Ukraine and Croatia
on the EU market increased from 7.7% (in 1997) to 13.8% during the inquiry period from
November 1, 1997 till October 31, 1998.
According to the data of the Ukraine’s State Customs
Service, during the whole period of inquiry, export of seamless tubes from Ukraine
accounted for 104.5 ths. tons or 8.75% of the EU market consumption, but not the 11.2%
reported by the European Commission.
Antidumping duty will be imposed on the following types of
tubes:
steel seamless tubes for oil and gas pipelines, up to 406.4 mm in outer
diameter (CN codes 7304 10 100 and 7304 10 300);
CR and cold-drawn seamless tubes made of carbon steel with round
cross-section (CN code 7304 31 990);
seamless tubes with round cross-section, up to 406.4 mm in outer diameter
(CN codes 7304 39 910 and 7304 39 930).
In Ukraine, these tubes are manufactured by Nizhnedneprovsk
Tube Rolling Plant, Nikopol YuzhnoTrubny Plant, and Dnepropetrovsk Tube Plant, as well as
by Mariupol Ilyich Iron & Steel Works.
In the total export of steel tubes from Ukraine, in 1997,
seamless tubes contributed 45.2% (626.8 ths. tons), in 1998 – 57.8% (468.6 ths. tons),
and in the 8 months of 1999 – 63.3% (312.4 ths. tons).
In 1997, the EU consumed 10.6% (66.7 ths. tons) of the
Ukrainian exports of seamless tubes, in 1998 – 19.4% (91.1 ths. tons), and in the 8
months of 1999 – 17.9% (56.1 ths. tons).
Previously (in November 1997), there was introduced an
antidumping duty on exports to the EU of seamless tubes produced in Czech Republic,
Hungary, Poland, Romania, Slovakia, and Russia. The antidumping duty on Russian seamless
tubes accounted for 27%.
According to the data of the European Commission,
introduction of such a measure decreased the share of these countries on the EU market
from 19% in 1997 to 14.8% in 1998 and increased prices for tubes from ECU/MT 440 to ECU/MT
470.
Perhaps, such change of the situation on the European
market for seamless tubes, as well as agreement on September supply of the specified
volumes of tubes creates all the prerequisites for possible suspension of antidumping
procedures against Russia some time in late-September 1999, according to Interfax Agency
Supposedly, withdrawal of antidumping restrictions will
allow increasing export of Russian seamless tubes to the EU market by nearly USD 30 mln.
annually.
RUSSIA
According to Interfax, production of steel tubes by Russian
enterprises in the 7 months of 1999 increased to 1,513.1 ths. tons (up by 15.2% against
the respective period of the last year), including 824.1 ths. tons (54.5%) of seamless
tubes and 643.9 ths. tons (42.5%) of electric-welded tubes.
In January-July 1999, seven major producers of tubes
manufactured 1,234.9 ths. tons of products or 81.6% of the total Russian output against
79.2% in the respective period of 1998 (see table 4).
Table 4. Production of steel tubes by Russian
enterprises
|
Enterprise |
Production |
7 months |
6 months |
|
|
Jan-July 1999, ths. |
Jan-July 1998, ths. |
|||
| Total for Russia |
1,513.1 |
1,785.1 |
84.8 |
77.1 |
| Including by tube plants: | ||||
| Volzhsk Tube Plant |
187.9 |
136.8 |
137.4 |
374.4 |
| Vyksa Metallurgic Works |
145.5 |
227.4 |
64.0 |
59.6 |
| Pervouralsk Tube Rolling Plant |
208.8 |
278.2 |
75.0 |
64.2 |
| Seversk Tube Rolling Plant |
122.5 |
241.9 |
50.6 |
44.5 |
| Sinarsk Tube Plant |
138.2 |
130.2 |
106.1 |
94.9 |
| Taganrog Metallurgic Works |
199.0 |
205.6 |
96.8 |
94.4 |
| Chelyabinsk Tube Rolling Plant |
233.0 |
331.3 |
70.3 |
66.1 |
| Total by plants |
1,234.9 |
1,551.4 |
87.3 |
76.4 |
| Average monthly production |
176.4 |
221.6 |
— |
— |
Sources: Interfax, CherMetInformatsiya, MetallExpert
At the same time, it is worth mentioning the tendency for
increase (+7.7%) when comparing production of steel tubes by Russia in the six and seven
months of the present and last years. The seven major producers indicated a slightly
higher increase figure reaching +10.9%.
However, all these tube plants except for Volzhsk and
Sinarsk Tube Plants didn’t reach the level of 1998 by the results of work in the seven
months of 1999. Seversk Tube Rolling Plant lags the most (50.6% of the last year’s
level), and Taganrog Тube Plant – the least (96.8%). Distressful situation at Seversk
Tube Rolling Plant is stipulated by lack of strips for production of welded tubes, while
capacities to produce seamless tubes are utilized by only 80-90%.
Summarizing the available information, the Russian market
for steel tubes can be presented as follows (see table 5).
Table 5. Russian market for steel tubes in 1998-99,
ths. tons
|
Parameter |
1998 |
6 months of 1998 |
6 months of 1999 |
1999 (forecast) |
| Production |
2,815.6 |
1,578.5 |
1,216.5 |
2,450-2,500 |
| Exports |
289.7 |
100.8 |
207.4 |
400-500 |
| Interior supplies |
2,525.9 |
1,477.7 |
1,009.1 |
2,000-2,050 |
| Imports |
— |
501.9 |
331.6 |
650-700 |
| Total domestic consumption |
— |
1,979.6 |
1,340.7 |
2,650-2,700 |
Sources: Interfax, MetallExpert
The conducted analysis of operations of Russian tube plants
allows estimating the 1999’ production of steel tubes at 2,450-2,500 ths. tons, which is
equivalent to 87-89% as against the year-before level. At the same time, significant
increase in export is expected – approximately as high as 1.4-1.7 times. The latter is
mainly stipulated with the improvement of price conjuncture for Russian tubes. It should
be mentioned that Russian tube industry is significantly orientated at interior consumers.
About 83% of the manufactured steel tubes are directed to the domestic market. It is
expected that in the current year interior supplies will decrease to approximately 79-81%
as against the 1998’ level.
USA
Presently, the US market for oil tubes features a relative
stability. Analysis of the average monthly prices in the period of May-July 1999 witnesses
that deviation from the average level of prices in this period ranges within +/-(0.1-0.6)%
by all the types of oil tubes (see table 6).
When comparing the change in prices for oil tubes
(0.2-1.2%) with the growth in prices for oil (2.5-3.0%) over this period, one can notice
the increased prices for oil only slightly affected the prices for oil tubes.
It should be mentioned that in the period under review
there was observed a rather stable increase in prices for electric-welded tubes: from
USD/MT 3 to USD/MT 5 for casing electric-welded tubes and from USD/MT 4 to USD/MT 5 for
production tubing.
During the period under review, the prices for seamless
tubes were stable. Some changes, registered in May-July, didn’t exceed USD/MT 1 and
lacked a clear trend, which was mainly stipulated with rather high stocks of these tubes.
Table 6.Average monthly prices for oil tubes on the
US interior market (in Houston area), USD/MT
|
Tube |
Price |
Average |
||
|
May 1999 |
June 1999 |
July 1999 |
||
| Service production tubing: | ||||
| Contact electric-welded (carbon and annealed steel) |
697 |
698 |
701 |
699 (+/- 0.3%) |
| Contact electric-welded (grade #80) |
872 |
872 |
877 |
874 (+0.3/- 0.2%) |
| Seamless (carbon steel) |
825 |
829 |
826 |
827 (+/- 0.2%) |
| Seamless (grade #80) |
944 |
939 |
944 |
942 (+0.2/- 0.3%) |
| Casing tubes: | ||||
| Contact electric-welded (carbon and annealed steel) |
537 |
543 |
540 |
540 (+/- 0.6%) |
| Contact electric-welded (grade #80) |
639 |
642 |
647 |
643 (+/- 0.6%) |
| Seamless (carbon steel) |
682 |
685 |
681 |
683 (+/- 0.3%) |
| Seamless (grade #80) |
733 |
732 |
734 |
733 (+/- 0.1%) |
Source: CherMetInformatsiya
JAPAN
The market for steel tubes utilized in nuclear reactors
features certain stability. According to the information with CherMetInformatsiya,
Japanese metallurgic mills Sumitomo Metal Industries Ltd. and Kobe Steel Ltd. intend to
create a JV engaged in production and sales of tubes made of special alloyed steel for
nuclear reactors. It is planned to complete setting up of the JV by April 2000. It is
expected that sales of the new company will account for some YEN 4 bln. and that the JV
will hold important position on the market for these products. Presently, the available
capacities to produce 4-meter tubes from special alloyed steels allow manufacturing 200
ths. items annually.
DerzhZovnishInform