In 2010, Russia's tubular products market capacity will amount to 8.3 million mt, including 2.5 million mt of large diameter (LD) pipes, while in 2011 it will amount to 8.2 million mt, including 2.2 million mt of LD pipes, Uraltrubostal Trading House's strategic marketing director Sergei Aleschenko has forecasted. During the crisis period, Russia's tubular products market capacity decreased from 8.9 million mt in 2007 to 6.1 million mt in 2009.
According to Mr. Aleschenko, in H1 2010 tubular products consumption in the domestic oil and gas industry increased by 78 percent, consumption in the fuel and energy sector went up by 25 percent, in the petrochemical sector it rose by 41 percent, in the machine building industry by 35 percent, in the energy sector by 51 percent, and in construction and housing it rose by 25 percent, all compared to H1 2009. Regardless, due to the deep fall of consumption in 2009, in 2010 an increase was registered just in the pipeline transportation segment, with a sharp growth (by 3.2 times year on year) in the production and consumption of LD pipes, while the increase in other industry segments is considered to be just a recovery.
In 2010, Russia's imports of tubular products are expected to exceed one million mt, while in 2011 this number is expected to decrease to about 833,000 mt, due to the start-up of new pipe production capacities. In January-August 2010, Russia commissioned 1.2 million mt of pipe production capacities, and by the end of the current year about 292,000 mt of additional capacity is planned to be commissioned. Thus, in 2010 Russia will have 1.5 million mt of new pipe capacities, equivalent to the increase in market capacity.
At the end of Q4, a small upward correction might be seen in the prices for semi-finished and pipe products. "Next year we expect an upward trend of 15 percent in steel product prices," Mr. Aleschenko said, adding that prices for tubular goods in H1 2011 are also expected to increase by more than 10-12 percent compared to Q4 2010.