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’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
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
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 manufactur-
ers, whereas the situation in the indus-
trial and energy sector continued to be
tight. Weak demand also was posted in
the stainless steel sector; by company ac-
counts, the relatively high order volumes
of the power plant sector failed to com-
pensate 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.
German Steel Tube Association,
Kaiserswerther Strasse 137, 40474
Düsseldorf, Germany, 49-211-456-
4131, firstname.lastname@example.org, www.wv-stahlrohre.de
Messe Düsseldorf North America, 150 N.
Michigan Avenue, Suite 2920, Chicago,
IL 60601, 312-781-5180, info@mdna.