A small but important recovery in demand has been registered for Spanish seamless pipes with increasing orders from foreign customers pushing up domestic production. Recovery in the European seamless pipe market is likely to be helped further by the antidumping measures against imports of seamless pipes from China that were imposed in October 2009. Similar duties are being considered against Chinese materials by the authorities in the US, the main market outside Europe for Spanish pipe producers, and by India. Antidumping duties on imports of OCTG from China to the US, if finalized by the US International Trade Commission in May, may push Spanish exports even higher.
The Spanish seamless pipe producer Tubos Reunidos reported that its results recovered strongly in the first quarter, but that the results remain below pre-crisis levels. The positive results were achieved mainly due to a recovery in overall activities and the impact of the plan for reducing costs which began in 2009 and is continuing into 2010. However, domestic demand remains a major drag on growth: private consumption has stabilized at a low level and investment has weakened further. While exports will remain the key driver of economic growth in Spain, the prospects for domestic demand will remain subdued.
Domestic prices of seamless pipes in Spain have increased by €110/mt in the past month. Import prices for Chinese seamless pipes have climbed up by €90-100/mt over the same period, while Ukrainian offers have risen by €45-50/mt.
Current domestic prices for 2"-6" hot-formed seamless pipes grade B made to ASTM A106/API 5L are at around €970-990/mt ex-works.
Prices for Chinese seamless pipes, 2"-6" grade B made to ASTM A106/API 5L, are at about €780-840/mt C&F, exclusive of antidumping duties (in the range of 17.7-39.2 percent depending on the producer).
Offers of Ukrainian seamless pipes, 2"-14" grade B made to ASTM A106/API 5L, are at €930-965/mt DDU. These prices are exclusive of 25.1 percent antidumping duty.
Quotations of Italian seamless pipes, 2"-6" grade B made to ASTM A106/API 5L, to Spain are at €1,030-1,050/mt CPT.