March 16, 2001 became the bad day for Ukrainian tube manufacturers, because it was when the Russian Committee on Protective Measures in Foreign Trade decided to impose a 40% protective duty on import of tubes made of ferrous metals from Ukraine and a 20%

STEEL TUBES

STEEL TUBES

UKRAINE

March 16, 2001 became the bad day for Ukrainian tube
manufacturers, because it was when the Russian Committee on Protective Measures in Foreign
Trade decided to impose a 40% protective duty on import of tubes made of ferrous metals
from Ukraine and a 20% import duty on large-diameter tubes, which are not made in Russia
(source: BIKI Bulletin). Deputy minister for economic development and trade of the Russian
Federation Mr. Medvedkov declared that proposals on introduction of import duties were to
be passed on to the Government of the Russian Federation by March 30 if Ukraine did not
agree to the introduction of a 480-ths.-ton annual quota on import of its tubes to Russia.
Further developments were more like a detective story.

Correspondent.net published the information that Ukrainian
Vice Prime Minister Mr. Oleg Dubina, during negotiations with his Russian colleague Mr.
Alexey Kudrin, arranged for a postponement of Russia’s introduction of the indicated
duties on imports of Ukrainian tubes until April 15. At the same time, Mr. Kudrin’s
press-secretary Evgeniy Yezhov announced that upon completion of negotiations with Mr.
Dubina, Russian Vice Prime Minister made an order on preparation of a draft regulation of
the Government of Russia on introduction of a 40% duty on import of Ukrainian tubes.

On April 4, mass media released the information that
Ukrainian Prime Minister Mr. Viktor Yuschenko was planning to schedule a meeting with
Chairman of the Russian Government Mr. Mikhail Kasyanov for April 10, and, according to
the most recent reports, apart from other Ukrainian-Russian problems, they would be
discussing the tube problem as well. To be continued…

In March, Russian magazine Profile published an interview
with Ukrainian deputy minister for economy Mr. Andrey Goncharuk entitled “Concerto
Finale for Trumpet” (note: in Russian, “trumpet” and “tube” are denoted by the
same word), which discoursed on problems experienced by Ukrainian tube manufacturers on
the Russian market. The high importance of this problem is illustrated by the very fact
that a Russian magazine addressed its questions to a Ukrainian high-rank official. In the
interview, it is emphasized that Ukraine is Russia’s third largest trading partner after
Germany and Belarus, and ferrous and non-ferrous metallurgical products account for 30% of
the total Ukrainian exports. Consequences of the anti-dumping inquiry will do harm to
Ukrainian producers and Russian consumers. Moreover, the latter will suffer in
strategically important for Russia spheres of cooperation. It is only Russian steel tube
manufacturers who will benefit from these measures (and, in our opinion, only in the
short-term prospect). Neither do Russian officials take into account the global tendency
towards a reduction of prices for metal products.

According to data with Metallurgprom Association, primary
Ukrainian steel tube manufacturers made 270 ths. tons of tubes (Table 1), which makes up
only 79% of tube output in November-December 2000, but in comparison with the figure
reported in January-February 2000, corresponds to a 73% increase of output.

Proceeding from the average monthly output figures, only
Lugansk, Khartsyzsk, and Nikopol Tube Works have exceeded their 2000’ outputs: their
production figures this year are equal to 156.3%, 131.0%, and 108.5% of those reported in
the last year’s corresponding period respectively. Kominmet was also able to somewhat
surpass its last year’s production. Such enterprises as Nizhnedneprovsk Tube-Rolling
Mill and Mariupol Ilyich Iron and Steel Works (ISW) are rather close to their last
year’s figures (90.8% and 84.9% respectively). Dnepropetrovsk and Novomoskovsk Tube
Works were the last ones in the list of primary tube manufacturers in the first two months
of the current year (64.2% and 71.4% of the last year’s outputs respectively).
Notwithstanding the fact that Nizhnedneprovsk Tube-Rolling Mill reached only 81% of the
last year’s level of production, it has the largest share (34.4%) in the aggregate
output of the indicated tube-making plants. It must be pointed out that three enterprises
(Nizhnedneprovsk Tube-Rolling Mill, Khartsyzsk Tube Works, and Nikopol Tube-Rolling Mill)
collectively provided 74% of Ukraine’s total tube output in January-February of the
current year.

According to preliminary data, steel tube exports from
Ukraine came to approximately 201 ths. tons worth USD 109 mln. in January-February 2001.
It is remarkable that exports jumped 1.8 times against the figure of January-February 2000
but made up only 77% of exports in November-December 2000. At the same time, it is
noteworthy that in February, the country exported some 28% more steel tubes than it did in
January of the current year (Diagram 1). However, even February’s export figure is 1.5
times lower than the highest one of the previous year, which was reported in October (171
ths. tons).

Diagram 1. Export of steel tubes from Ukraine in
2000-2001

It should be noted that the structure of steel tube exports
from Ukraine is as follows in 2001: seamless tubes – 54.9% (against 61.8% in 2000),
large-diameter welded tubes – 27.4% (20.8% in 2000), and other welded tubes – 17.7%
(17.4% in 2000).

In January 2001, Ukraine supplied steel tubes largely to
CIS countries (approximately, 81% of the total). Out of this quantity, seamless tubes
accounted for 49.3%, large-diameter welded tubes – 33.5%, and other welded tubes –
17.2%.

The EU is the second among the regions, to which Ukrainian
tubes were shipped. EU countries accounted for 7.1% of the total Ukrainian tube exports.
This region did not import Ukrainian large-diameter welded tubes, but only seamless tubes
(69.1%) and other welded tubes (30.9%).

Asian countries moved to the third place in terms of
Ukrainian tube exports with 4.9% followed by East European countries (3.2% of the total).
In the first two months of 2001, Asian countries imported only seamless tubes (94.8% of
the total quantity imported by them from Ukraine) and large-diameter welded tubes (5.2%).

Seamless tubes

In January-February 2001, Ukraine exported its seamless
tubes to only 36 countries, as compared with 57 countries last year. The largest consumers
of Ukrainian seamless tubes were as follows in the report period: Russia (63.2 ths. tons
or 57.2% of the total quantity of this tube type exported from Ukraine), Kazakhstan (8.9
ths. tons), Germany (7.1 ths. tons), as well as Uzbekistan and Turkey (3.2 ths. tons
each). These five countries collectively accounted for approximately 77.5% of Ukraine’s
seamless tube exports.

Speaking about regions, most of this type of tubes were
exported to CIS countries (72.8% of the total exports of seamless tubes from Ukraine), EU
countries (8.9%), and Asia (8.5%).

Large-diameter welded tubes

These tubes were exported to 9 countries in the report
period. Russia accounted for the lion’s share of Ukraine’s exports of large-diameter
welded tubes (94.6%).

Other welded tubes

In January-February 2001, other welded tubes were mainly
shipped to CIS countries (79.1% of the total quantity exported, including 51.8% purchased
by Russia). Among other regions, most of Ukrainian other welded tubes were consumed by EU
countries (12.4% of Ukrainian exports of this type) and East European countries (4.9%).
Altogether, Ukraine sold this type of tubes to 21 countries worldwide.

In the period under review, Ukraine imported around 5.6
ths. tons of steel tubes worth USD 4.2 mln.

Out of the imported quantity, seamless hot-rolled tubes
accounted for 76%, other welded tubes – for 23.8%, and large-diameter welded tubes –
for 0.2%. The most substantial quantities of seamless tubes were purchased from Russia
(2.6 ths. tons), Austria (1.1 ths. tons), and Poland (0.2 ths. tons). The three indicated
countries collectively covered 94.6% of Ukraine’s import of this commodity group. Other
welded tubes were imported from Germany (0.9 ths. tons) and Russia (0.3 ths. tons), which
provided 86.9% of the total Ukrainian imports of this type of tubes. Large-diameter welded
tubes were purchased only in the Czech Republic and Italy. Thus, speaking about
geographical pattern of the country’s tube imports, in the report period of
January-February 2001, Ukraine imported other welded tubes from 23 countries, seamless
tubes – from 18 countries, and large-diameter welded tubes – from 2 countries.

Summarizing the data on Ukraine’s production, export, and
import of steel tubes in January-February 2001 and comparing them with the corresponding
figures reported in 2000, it is possible to conclude that the general situation on the
market for Ukrainian steel tubes has worsened.

Analysis of the generalized data, which take into account
the average monthly figures indicates that there is an approximately 2.7% curtailment of
output of steel tubes and a 4.5% reduction of their exports in 2001, as compared with 2000
(Table 2).

At the same time, it is necessary to mark an augmentation
of steel tube supply on the domestic market, which have added 2.7% against the last
year’s figure. Along with that, imports of steel tubes have added 12%, as compared with
the last year’s imports.

USA

The American market of oil tubes kept a positive tendency
over the period of September 2000 – February 2001.

In the report period, prices for tubing added 1% on average
and those for casing tubes – 1.1% up (Table 3).

Average monthly prices for seamless casing carbon tubes
indicated the most substantial growth of 3.2%. At the same time, among the indicated tube
types, seamless casing tubes (#80) exhibited the most considerable price decline – 0.8%
down. In general, it must be pointed out that the growth of prices for oil tubes on the
American market has now slowed down.

Vitaliy GNATUSH, expert with Derzhzovnishinform

Table 1. Output of steel tubes by Ukrainian mills,
ths. tons

*Source Metallurgprom Association

Table 2. Ukrainian market for steel tubes

Table 3. Average monthly prices for oil-conveyance
tubes on the U.S. interior market

(Houston district) in 2000-2001, USD/ton

Data source: Herald of OJSC CherMetInformatsiya.