Cyprus-registered seamless stainless steel tube and pipe producer Centravis Holding (Centravis) has analyzed development trends in the seamless stainless steel tubes and pipes world market in the January-February period of the current year.
Raw materials
According to Centravis' analysts, in January-February the commodity market value of raw materials saw both decreases and increases. The main reason for raw material price reduction was the expectation of a decrease in nickel demand among Asian steel companies, while the rise in nickel prices was caused by speculative sentiment, driven by announced improvements in key indicators of global economies, thereby increasing the appeal of the stock markets for investment funds. Meanwhile, the increase in prices was associated with growth in nickel demand in the first half of 2010.
The main influence on metal price quotations in the coming months will be growth in nickel demand from stainless steel companies. Thus, growing demand for stainless steel in the Chinese market is forcing stainless steel production to increase capacity utilization (at the beginning of February it was 85-90 percent). The capacity utilization of the producers from Taiwan, South Korea and Japan, all oriented towards the Chinese market, in February reached 80-85 percent and will keep growing in the second quarter of 2010.
A gradual increase in purchasing activities was observed in the European market, and therefore companies in late January-early February increased their capacity utilization to December levels, i.e., to 60-70 percent. According to Centravis' experts, European producers of raw materials in the first half will slightly increase austenitic stainless steel melts. The seasonal increase in demand for stainless steel rolled products in major regional markets will contribute to the consolidation of nickel average quotations in the second quarter.
Analysis of world prices for seamless stainless steel tubes and pipes
Prices for stainless steel seamless tubes and pipes in December and January had tendencies towards decrease. The fall in nickel prices as well as the business slowdown during the holidays influenced the fall in prices for seamless stainless steel tubes in all regions. In Europe, prices on average fell by four percent, in America by two percent, while in Asia they remained relatively stable.
Analysis of seamless stainless steel tubes and pipes market in CIS countries
According to Centravis' experts, the consumption of seamless tubes and pipes in Russia increased by 15 -20 percent in December.
The demand for seamless stainless steel tubes and pipes in January was low - consumers refrained from purchasing products which had become more expensive after the introduction of import duties, which also influenced the overall slowdown in business. In general, the seamless stainless steel tubes and pipes market in Russia in January-February remained relatively balanced. But since March trading companies will be forced to increase significantly purchases of imported products, to meet the increasing demand and replenishment.
"In the near future we expect a slight increase in cost of products from storage companies (by a maximum of two percent). Products of import manufacturers will increase more significantly. This is mainly due to the growth in prices of Chinese suppliers and the effect of import duties," Centravis Production Ukraine's strategic marketing department head Eugenyy Alekseenko commented with respect to the trends in the Russian market.
Analysis of seamless stainless steel tubes and pipes market in Ukraine
In January-February 2010, Ukrainian producers of seamless stainless steel tubes and pipes (Centravis Production Ukraine and Interpipe's Niko Tube) produced a total of 1.645 million mt of products.
| Jan 2010 (mt) | Feb 2010 (mt) | |
Centravis Production Ukraine | 700,100 | 817,620 | |
Niko Tube | 83,020 | 44,600 | |
Total | 783,120 | 862,220 | |
"Today we observe stable growth in production volumes of Centravis Production Ukraine, and a substantial widening of product portfolio due to the commissioning of new equipment. Moreover, we see positive dynamics of orders for tubular products for project business and atomic power engineering in particular," Mr. Alekseenko said.