The Italian market for seamless pipes has lately been characterized by contrasting trends. Despite weak demand for Italian material in the domestic market, Italy-based Tenaris Dalmine, the top global producer of seamless steel pipes for the energy industry, has raised domestic and export quotations for seamless pipes, oriented mainly at the export markets. Tenaris expects iron ore costs to start coming down in the third quarter and forecasts big potential in the United States in increased drilling on land for natural gas. Tenaris has been hurt by rising costs, especially for iron ore. By the third quarter, market players will have started to see a change in the price trend and expect costs to go down.
Thus, domestic and export quotations of Italian seamless pipes have increased by €70-80/mt over the past month. Over the same period offers of Chinese material have moved up by €10-30/mt. On the other hand, offers of seamless pipes from the CIS have started to decline due to weak demand from Italian customers. Prices of Ukrainian seamless pipes for Italy have declined by €100-120/mt, while import quotations of seamless pipes from Belarus have decreased by €70/mt.
Current domestic prices for Italian seamless pipes of 2"-6" size grade B as per ASTM A106/API 5L are at about €1,070-1,090/mt ex-works.
Export quotations of Italian seamless pipes of 2"-8" size grade B as per ASTM A106/API 5L are at €1,100-1,120/mt FOB, excluding the trader's margin.
Prices for Chinese seamless pipes 2"-6" grade B made to ASTM A106/API 5L are at about €770-850/mt C&F Italy, exclusive of antidumping (AD) duties (in the range of 17.7-39.2 percent depending on the producer).
June-July production Ukrainian 2"-14" seamless pipes ex-Interpipe grade B as per ASTM A106 are offered to the Italian market at around €800-830/mt DDU (25.1 percent AD duty is not included in this price range).
Prices for Romanian origin seamless steel tubes (ArcelorMittal Romania) 3"-6" grade B made to ASTM A106 are at about €1,040-1,065/mt CPT.
Offers of July production 2"-6" hot-formed seamless pipes ex-Belarus SW (BMZ) grade S235JR as per DIN EN 10216 are being given to the Italian market at €760-780/mt CPT.
For 2010 it is expected that the seamless pipe sector will see a moderate recovery which should gradually gain strength over the year. Prospects for the OCTG market are improving. Since March this year the crude oil price has been holding steady at around $80 per barrel. The rebound in the global economy will lead to further upward pressure on oil prices, which are expected to reach $85-95 per barrel in the course of 2010. This will have a positive impact on global drilling and exploration activity and suggests that oil companies may restart some previously mothballed pipeline projects. In this context, exports of Italian seamless pipes are expected to register a gradual growth.