Page 8 - ITAtube Journal 3 2024

Market information
Dr. Gunther Voswinckel, VOSCO GmbH
World Tube & Pipe Market: Factors
influencing the current situation
Dr. Gunther Voswinckel – Update as per December 2024
Welcome to ITA’s and VOSCO´s regular
of the industry. Due to the dynamic nature
presentation of the main worldwide
of current developments, it is increasingly
economic factors influencing the tube
challenging for the industry to react appro-
and pipe industry.
priately. Some manufacturers are losing
confidence in their ability to compete on
The year 2023 was a record year for the
the global market with the costs cost levels
entire tube and pipe industry. Strong
and are even reducing their involvement in
demand and high prices mainly driv-
Europe as a result. Some countries/regions
en by the oil and gas sector resulted
are therefore looking for suitable political
in good profits for the tube and pipe
countermeasures to compensate for their
industry. But already in the middle of
cost disadvantages.
2023 the demand and prices started to
erode which caused production cuts in
Geopolitical and logistical risk considera-
the first 6 months of 2024 by -4%. India,
tions as well as current and future energy
USA, CIS and China had the largest cut-
costs are now increasingly taking centre
backs in tube and pipe production.
stage. All sources of supply are being crit-
ically scrutinized, and one can only hope
Geopolitical turbulences are still ongoing.
and warn that international trade will not
Their supporting impact on the OCTG
suffer too much as a result. In particular,
tubular market after a period of high de-
regional differences in energy prices will
mand is not so significant anymore. The oil
have an impact on the current landscape
prices stay relatively low and so far, there
of the energy-intensive steel and tube
are no signs for major changes. The auto-
industry.
motive industry, also an important market
for tubes and pipes is recovering from
However, disruptive times also always
slowdowns but undergoes major structur-
create new opportunities for economic
al changes towards electro mobility. For
success. New markets such as Carbon Cap-
example, in the EU due to political ban to
ture Utilization and Storage (CCUS), new
sell combustion engine vehicles from 2035
pipelines as well as networks for hydrogen
onwards, such combustion car related
transport, electromobility and productivity
production facilities move to other regions
improvements at production sites as part
where combustion driven cars are allowed
of the transformation to more environ-
and required - tube producers may follow.
mentally friendly plants offer opportuni-
Mechanical engineering and construction
ties that need to be exploited.
maintain their strong position despite
The availability of economical energy is a
temporary slowdowns. The necessary
decisive factor for the industry. Geopolit-
transition to environmentally friendly and
ical turbulences and political regulations
carbon-reduced production is a central
have changed the regional balance with
task for the industry. The consequences
increasing challenges for the industry in
of the related costs increases are une-
regions with higher energy cost. The indus-
venly distributed around world. Europe is
trial landscape of the energy intensive
confronted with comparatively high energy
industry is already taking consequences.
prices and levies for carbon-intensive
industries. Regions such as the USA, India,
The prices for electrical energy, after
Turkey, Middle East and China are ben-
turbulent periods, is now reported at a
efiting from lower energy costs. Political
level of about 40-110 €/MWh (figure 1).
intervention and regulations are increas-
In Europe the span of the average prices
ingly influencing the strategies and actions
in 2024 is between 50 – 100 €/MWh. This
8 ITAtube Journal December 2024