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Market information
Fig. 5: Crude oil Brent price as per June 27, 2018. Source: NASDAQ
(a surge of +20 % after 2 weak years); only the Nafta region showed a downward trend (-4 %) (Fig. 3).
The overall health – and hence attractiveness - of the auto market is amply illustrated by the remark- able growth of 16 % displayed by the German car production industry from May 2016 to May 2018. Since pipe usage in cars is growing in parallel, the auto- motive market is likely to remain an attractive market segment for pipe producers.
The tube and pipe market in the building and construction indus- try is smaller but nonetheless attractive due to a world indus- try growth of about 3.3 % per year (see also ITAtube Journal 4 2015). Urbanization and popula- tion growth are the driving factors here.
In 2017, world steel tube pro- duction was again dominated by China (55 %), followed by other/ ROW (17 %) (Fig. 4). It is worth noting that China’s market share was reduced by 3 % from 58 % in 2016 to 55 % in 2017. This was balanced by growth in ROW, EU27 (+1 %) and US (+1 %) market shares.
In 2014 the oil and gas markets were ooded by shale gas prod- ucts. In the 2nd half of 2014, oil prices plummeted from 110 US$/ barrel to 36 US$ in February 2016. Subsequently, they recovered overall somewhat, hitting 52 US$ in August 2017 (Fig. 5), mainly thanks to the OPEC countries and their exploration partners reducing output to minimize the glut. By June 2018, oil prices had climbed to about 77 US$/barrel.
Analysts were assuming another reduction in oil prices, re ected
Fig. 6: US crude oil stock volume as per June 22, 2018. Source: EIA
Fig. 7: Cost to produce a barrel of oil
Source: UCube by Rystad Energy, published Feb.16, 2018
ITAtube Journal No2/July 2018