Indeed, there is no other word the present situation could be described with but “extreme”. At the beginning of the 90s, Ukrainian tube industry produced more than 7 mln. metric tons of various steel tubes per year and firmly ranked among the ten largest

IN THE LABYRINTH OF PROBLEMS

with no clear way out

Evgeny KUZNETSOV, Doctor of technical sciences, Alexander GOLOVKO, candidate of technical sciences

Indeed, there is no other word the present situation could be described with but “extreme”. At the beginning of the 90s, Ukrainian tube industry produced more than 7 mln. metric tons of various steel tubes per year and firmly ranked among the ten largest manufacturers in the world. By the end of 1998, output of steel tubes reduced as low as 5 times. Decline in production continued in 1999 as well: according to the forecasts, it could reduce as low as 1.5-2 times against the 1998 figure.

In the present situation, the problem of resuscitation of Ukrainian tube industry becomes particularly urgent. One of the issues of this problem is availability of reliable and permanent markets, which depends on competitiveness of products manufactured. In market economy, the concept of competitiveness of an enterprise is defined by a series of factors. The main ones are the wide range of products manufactured, high level of products’ quality, the lowest production costs, as well as ability to meet the agreed-upon deadlines on contracts. Considering all this, let’s concentrate on the issue of how well Ukrainian tube plants can compete both on the domestic and foreign markets.

Unfortunately, analysis of the current state of affairs in the world tube industry and its development trends gives no grounds to hope for improvement of the situation in steel tube manufacturing in the near future. The point is that manufacturing technologies changed fundamentally within the last 10-15 years, manufacturing programs were revised considerably, the product mix expanded and requirements to production quality became higher. Within the mentioned period, there appeared new tube-consuming areas, which called forth significant changes in the market pattern. To be fair, the majority of Ukrainian tube manufacturers are simply not familiar with these new areas. In recent times, foreign competitors have re-equipped their manufacturing processes, introduced modern super-efficient production equipment, which enables manufacturing high-quality steel tubes with minimal power consumption and metal losses.

Let’s analyze certain key issues, which are directly or indirectly related to the issue of competitiveness.

Obviously, nobody will object that, prior to relying on orders and stable markets, one should estimate his own potential and possibilities. In this regard, let’s examine the technical potential of Ukrainian tube plants.

In the world practice, tubes are classified as follows:

• oil-conveyance tubes (production tubing, casing tubes and drill tubes);

• conventional tubes;

• pipeline tubes;

• mechanical tubes;

• high-pressure tubes (mainly boiler tubes);

• structural tubes; and,

• tubes made of stainless steels and alloys.

This classification is of fundamental importance as it is the basis for modern standards and international tube labeling applied in export-import business.

A good illustration to all this is figure 1, which shows the shares of these types of tubes in sales on the US market in 1997 and 1998. It should be mentioned that mechanical tubes are the first in terms of sales turnover, definitely surpassing the other types of tubes. This situation is typical for the European market as well.

1. Oil tubes; 2. Conventional tubes; 3. Pipeline tubes; 4. Mechanical tubes; 5. Structural tubes; 6. Pressure tubes; 7. Tubes of stainless steels and alloys.

The group of mechanical tubes embraces hollow structural elements, which are used in civil and industrial engineering. These elements are subject to a number of specific requirements defined by ASTM 500-98; ASTM 501-98 and ASTM 513-98 standards in the USA and by EN 10219-97 and EN 10210-94 standards in Europe. Manufacturing of such mechanical tubes in the USA should be certified according to ISO 9002. In Europe, the manufacturer has to supply these tubes with the ‘U’ label, obtained after the TUF certification of tube production facilities. These tubes are made round, rectangular or square. Tube sections (especially large ones) are in strong demand on the global market, especially in the construction industry because certain countries have recently launched intensive civil construction projects, which apply novel technologies based on utilization of hollow structural elements. None of the Ukrainian tube plants manufactures such commodities at present and there are no plans for arrangement of their manufacturing in the near future.

Deficiencies of Ukrainian standards have resulted in the tube industry’s lagging behind in terms of other performance factors as well. The principal distinction of the world standards lie in the fact that the field of tubes’ application is the basis for standard, with technical requirements, norms and quality control methods following. The latter are enhanced and improved systematically. Manufacturing method is a secondary issue.

On the contrary, Ukrainian standards are based on manufacturing methods and potential of manufacturing plants, while consumers’ interests are considered to be secondary. Steel tubes are broken down to categories describing the manufacturing method, for example seamless, hot-finished, cold-finished, longitudinally-welded, spiral-welded, etc. The terms of “solid-drawn” and “solid-rolled”, which can hardly be given a clear definition, are still used in selected Ukrainian purchase orders for tubes. It can be confidently stated that such an approach of standard-makers initiated the erroneous development conception for the Ukrainian tube industry.

Modern foreign standards for most tube categories allow utilization of both seamless and welded tubes. This issue is very important as it allowed foreign competitors significantly altering the market pattern. In several cases, power-consuming and inefficient facilities for seamless tube manufacturing have been completely closed down. The data in figure 2 confirm this statement.

1. Oil tubes; 2. Conventional tubes; 3. Pipeline tubes; 4. Mechanical tubes; 5. Structural tubes; 6. Pressure tubes; 7. Tubes of stainless steels and alloys.

It is point of special interest that mass-production tubes, e.g. structural tubes, are made only as welded commodities. Welded tubes constitute up to 80% of the total output of conventional tubes, mechanical tubes and pipeline tubes. Weight per unit of length is the most important figure for this type of tubes. Consumers need to have the calculated length in meters, along with required dimensions and guaranteed quality, while the manufacturing method is of no principal importance for consumers. That’s why such tubes are ordered mainly thin-walled. The German DIN 2448 standard treats thin-wall conventional seamless tubes as “tubes with normal wall thickness”. Most of these tubes cannot be manufactured at hot-finishing units available in Ukraine. So, tube plants are forced either to offer laborious cold-finished tubes or to reject the tempting purchase orders. This is a consequence of the old concept applied in the Ukrainian tube industry, stating that commodities should be supplied by weight, not by length.

The problem of mass production of thin-wall conventional steel tubes can be relatively simply solved if tubes are welded. Modern electrical tube-welding mills can work at a speed of up to 140 m/min with simultaneous flash removal from both outward and inward surfaces. The range of manufactured commodities can be considerably expanded if such mills are employed in production lines together with reduction mills. Foreign competitors followed this way and now benefit from higher technical and economic performance compared to that obtained during seamless tube manufacturing even at continuous mills, not to mention the cold-finishing mills. Unfortunately, units for manufacturing of thin-wall tubes on the basis of welding and reduction mills are not used in Ukraine. This should be considered as yet another strategic mistake in the tube industry.

The trend for replacement of seamless tubes with the welded ones is not a new one. In fact, it has simply been ignored for many years. And now plants, which have large tube-drawing workshops and which have earlier manufactured thin-wall seamless tubes, will naturally suffer pay for these errors. First of all, this relates to Nikopol Yuzhnotrubny Works and Dnepropetrovsk Tube Works. The latter is in a particular tough situation due to deteriorated and obsolete equipment and the employed out-of-date hot-rolling technology. These two enterprises might be forced to largely cut production output and close down a number of workshops.

Nothing better than that is expected in welded tube manufacturing. Recently significant changes have taken place in production technologies and in technical performance of equipment. The quality of welded joints definitely improved following the increase in welding frequency up to 400-600 kHz, application of modern direct current generators, enhancement of impeders and flash trimmers, rigging of mills with measuring sets for temperature control in the arc zone and for continuous control over joint position, as well as a large number of other improvements. At the moment, welded joints are about similar to basic metal in terms of durability and serviceability. This resulted in generation of standards allowing application of welded tubes in units that operate under high pressure, high temperatures or in aggressive environments. The data on figure 2 illustrates that welded tubes make up some 60-80% of boiler tubes and tubes of stainless steels and alloys at present. For example, both seamless and welded tubes can be used even in fissile zones of nuclear reactors. Of course, this has become possible due to stable technologies, modern equipment and quite profound and extensive studies on quality of welded joints, which unfortunately have yet to be conducted in Ukraine. This gives a reason to criticize seamless manufacturing of this type of tubes, which prevails at Ukrainian plants.

Relatively small prices of modern electrical tube-welding mills have sharply changed the pattern of the global tube industry. In recent years, these mills have been assembled in many countries of Asia, Middle East and Latin America. Publications in the Internet, technical magazines and other sources evidence that up to 80% of new equipment developments for the tube industry and subjects of research & developments are more or less closely relate to technology of welded tube manufacturing. The nearest neighbors of Ukraine, such as the Czech Republic, Poland, Greece, Romania, Turkey and other countries, have lately constructed modern mills with technical performance significantly exceeding that of Ukrainian mills. During the years of confusion and economic turmoil in Ukraine, the global tube industry left the Ukrainian tube production far behind amongst the mediocre manufacturers. This is especially evident in welded tube production.

Modern requirements for conventional welded tubes, applied in automotive industry, mechanical engineering, civil and industrial engineering, are related to higher quality of tube surfaces during handling and delivery to consumers. These new standards require additional coating, painting and other finishing. Furniture industry is a large consumer of welded tubes with supreme surface finishing. Such tubes are in hot demand on the global market, but are virtually not produced in Ukraine. Out of mass-produced welded tubes, 21-114 mm in diameter, Ukrainian plants specialize only in manufacturing of water and gas tubes. There are no specific requirements for surface finishing of these types of tubes.

As it was already mentioned, demand for welded tube sections, used in construction, has definitely recovered on the world market. Two of the basic requirements for these tube sections are length and cross section dimensions. These tubes are supplied as ready-made structural elements with the following pre-ordered lengths:

• normal length, from 4,000 to 16,000 mm;

• measured length, more than 4,000 mm ± 50 mm;

• precise length, less than 6,000 mm 0/+ 5 mm, from 6,000 mm up to 10,000 mm 0/+ 5 mm + 1 mm/m.

It is a very complicated task to manufacture tubes complying with these requirements at Ukrainian mills.

Figure 3 illustrates the limited opportunities of domestic plants in getting the required cross section sizes of tube sections. This figure compares the range of square tubes defined by the European EN 10219-97 standard and dimensions of square tubes, which could theoretically be produced in Ukraine.

As regards production of tube sections, it should be taken into consideration that, according to the information in technical periodicals, a number of US and European companies will soon offer larger-size round and profile structural elements on the world market. These will comprise tube sections, over 1,600 mm in perimeter and up to 30 mm in wall thickness. At present, manufacturing of such tubes has became one of the priorities abroad.

In sale outlooks, serious attention should be paid to recession in demand for oil tubes, which are the bulk of manufacturing output of Ukrainian plants. Data on figure 2 witness that now this type of tubes is not the very first in global turnover and features a downward tendency. This is also related to the recent oversupply of crude oil on the world market. Norway, Mexico, Brazil, Iraq, Iran and a number of other countries, where no intercontinental pipelines are required, have lately joined the group of major oil suppliers. Extraction of oil in these countries is less expensive and quality of oil is higher than in Russia, which has been one of the major consumers of Ukrainian tubes until recently. In other words, hopes for large supplies of oil and pipeline tubes to Russia have become much more obscure.

In the present situation, relations among tube plants are changing rapidly. Their manufacturing programs were quite specialized before and they practically did not compete with one another. Owing to emergence of new tube standards and privatization of tube plants, the situation has changed fundamentally. Today, major Ukrainian plants, such as Nikopol Yuzhnotrubny Works, Dnepropetrovsk Tube Works, Nizhnedneprovsk Tube Rolling Works and Novomoskovsk Tube Works, are already starting to compete first of all in sales of casing, conventional, structural and some other types of tubes. This makes the situation in the Ukrainian tube industry even more complicated.

Limited market and backwardness of equipment are forcing to think of closing down not only a number of shops but also, what’s quite possible, whole plants sooner or later. Liquidation of enterprises with out-of-date equipment is not an extraordinary event in the world practice, moreover it is considered quite a usual thing. There are tons of examples proving that tube manufacturing in workshops similar to the pipeline tube shop at Novomoskovsk Tube Works, seamless tube shop at Dnepropetrovsk Tube Works or automatic unit shops at Nikopol Yuzhnotrubny Works were fundamentally reconstructed or closed down abroad at the beginning of the 70s. Electrical tube-welding shop at Ilyich Iron & Steel Works, Mariupol, is the only one more or less complying with the modern requirements. All the other plants are equipped with deteriorated and obsolete equipment, which cannot produce competitive commodities.

This is not the whole list of the present problems in Ukrainian tube manufacturing. Other problems include difficulties with purchasing hollow sections, shortage of current assets, outflow of skilled personnel, etc. One should also keep in mind that virtually nothing has been allocated for renovation of equipment and development of new technologies in the recent years. All this together has led to the present crisis. The most anxious is that no clear way out can be plotted yet. We have fell far behind our competitors.

• the Metal