Reducing oil projects and unfair competition from imports contributed to a 31.6 percent drop in domestic production of seamless pipes in Mexico from January to November 2015.
Teodoro Gonzalez, CEO of Tubacero said that weak activity in the energy sector has reduced demand for oil-related pipe, and only larger diameter tubes used in the construction of pipelines have seen an increase in demand.
Welded pipe production in Mexico increased only 2 percent in the same period, from a total of 931,504 tons in January to November 2014 to 950,100 tons from January to November 2015.
Tubacero, one of the main producers of pipe in Mexico, is operating at 40 percent of its installed capacity.
Tubacero, one of the main producers of pipe in Mexico, is operating at 40 percent of its installed capacity.
González specified that in 2015 production remained at the same levels of the previous year, equivalent to 240,000 tons.
"We thought we could have grown, I think even 15 percent or 20 percent. But imports of Chinese and Korean tubing increased," he said.
González said that while importing pipe is on the rise, generalized tariffs to curb unfair competition have not been applied on these shipments as in other steel products such as plate or sheet.