The general situation in the Bulgarian welded pipe market has not seen any dramatic change during the last two weeks. Demand from foreign customers remains at rather high levels, though a slowdown has been noticed in export sales of Bulgarian welded pipes. At the same time, buying activity of local consumers is down to minimum or almost zero levels. Bulgarian welded pipe producers report that customers prefer to wait for further developments in the market and are not making any large purchases given the falling prices for flat steel products. Over the past two weeks, domestic prices for Bulgarian welded pipes have declined by €10/mt, while export quotations have decreased by €10-30/mt. Market insiders expect to see a further decline in welded pipe prices in the coming weeks due to weak demand in the domestic market and falling prices for flats.
Current offers of locally produced welded pipes and hollow sections of 2-5 mm wall thickness made from S235JR grade HRC according to EN 10219 are being given to the domestic market at around €610-620/mt ex-works, exclusive of 20 percent VAT and on actual weight basis. Offers of similar pipes with wall thickness of 1.5 mm made from HRC are in the range of €650-660/mt ex-works. Domestic quotations of water and gas ERW pipes made to EN 10255 are at €630-640/mt ex-works.
Export quotations of Bulgarian ERW pipes and hollow sections of 2-5 mm wall thickness made from S235JR grade HRC as per EN 10219 are at the level of €620-650/mt ex-works on actual weight basis for June-July production. Offers of similar pipes with wall thickness of 1.5 mm made from S235JR grade HRC as per EN10219 are in the range of €670-700/mt ex-works. Export quotations of Bulgarian water and gas pipes according to EN 10255 are at €660-670/mt ex-works.
It is expected Bulgaria will register fragile economic growth for 2010 and will struggle to maintain the same level of employment as a few years back. According to the International Monetary Fund (IMF), investment will likely drop further in the context of an unwinding investment boom, tightened credit and weak economic activity, while private consumption is forecast to suffer from the decline in employment. Capital inflows are likely to remain low and domestic demand is expected to decline further, requiring substantial adjustments by both the private and public sectors.