Russia's Ministry of Economic Development (MED) expects the country's steel pipe output and consumption in 2010 to reach pre-crisis levels, considering the implementation of major investment projects during 2005-2010, which, it said, has allowed the improvement of product quality and increased competitiveness both in Russia and in overseas markets.
Accordingly, in 2010, the country is expected to increase its steel pipe production by 23.3 percent and by 2013 to record a growth of 41.6 percent compared to 2009, when its steel pipe output registered a drop of 14.4 percent year on year.
In the Russian domestic pipe market, the share of products for the fuel and energy sector in 2010 could exceed 65 percent, as the expected implementation of large-scale oil and gas projects may increase the need for large diameter (LD) pipes by more than 60 percent. "This need can be met by domestic production pipes, as the existing production capacities for LD welded pipes up to 1,420 mm amount to 3.8 million mt," reads the MED statement.
The MED noted that Russia's pipe production capacity, which in 2009 reached 11.4 million mt, can meet almost all the demand of the domestic market in terms of volume and quality, and it predicted a situation of surplus supply in the medium term.
More than 50 percent of Russia's pipes are exported to CIS countries. Currently, steel pipe demand in CIS is estimated at one million mt, however, considering the dynamics of supply, the MED expects the deliveries to this region to decrease in 2010 by 20.6 percent year on year to 750,000 mt. Russia's total export of pipes (including LD pipes) in 2010 is expected to amount to up to 1.25 million mt.
In 2007, Russia's steel pipe imports amounted to 17.5 percent of domestic consumption, to 13.6 percent in 2008, and to 10.8 percent in 2009, while in 2010 annual imports are expected to amount to 12 percent of domestic consumption, exceeding 950,000 mt.