Page 11 - ITAtube Journal 32022

Market information
Billet prices, used for seamless tubes have not risen nearly as much as hot rolled coil prices, yet these prices have also cooled from average 810 USD/tons to an average of around 500 USD/tonne (Figure 4).
This price rally has posed major challenges for our tube industry. Although pipe prices also reached all-time highs, the price increase was higher for hot-rolled coils in particular than for welded pipes, leading to an erosion of pipe manufacturers’ margins in many regions of the world (Figure 5).
as an example, so far about 20% of pipe imports have been served by Russia and the Ukraine. In the case of seamless pipes, the import share from Russia and Ukraine was even as high as 40%. These volumes need to be supplied by other tube and pipe producers. Russian shipments in 2022 will decrease by 34% on-year to 1.06 million tonnes, the RBC newspaper reports, citing a presentation from fund director Alexander Semenchishin. Domestic consumption in Russia is seen decreasing by 2% on-year
in 2022 to 9.12 Mio. tons. As a result, pipe production will fall by 5.5% to 10.04 Mio. tons. Many regions of the world such as Europe and North America need to com- pensate their pipe and tube imports from Russia and Ukraine.
As a result of the increased demand and the lower supply of pipes, pipe prices have risen by more than 50% compared to the previous year 2021 (Figure 6)
Until the beginning of October, pipe prices were still holding at high levels, but in November fears are being voiced from many regions that demand for pipes is weakening, which has an immediate impact on prices. Only the US is still reporting a sustained high for pipes. The expected decline in pipe demand and its negative impact on prices seems to be slower than the decline in prices for the input materials hot-rolled coils, plates and round billets. This would allow some pipe producers to compensate for some of the margin losses they suffered when input material prices exploded. The world tube and pipe produc- tion after a slight recovery in 2021 of 5%,
ITAtube Journal December 2022
Figure 6: World Tube and Pipe Production 2017 – 2022e , Source: Wirtschaftsvereinigung Stahlrohre e.V.
Figure 7: USA - Tube and Pipe Production 2020 – 2022e, Source: Wirtschaftsvereinigung Stahlrohre e.V.
was maintaining its world production level at about 150 Mio. tons in 2022.
Anyhow substantial regional differences are reported. Whereas the rest of the world (-22%) and India (-14%) suffer from less pro- duction of tube and pipes, the USA, driven by a strong OCTG and construction market report major growth in production (Figure 7).
Due to the coronal pandemic, supply chains and freight costs were severely affected. This situation has now improved. The supply chain pressure index has improved significantly, from index values of 4 at the
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