Total tube output in the European Union (EU) in the first quarter of the current year exceeded the forecasts, increasing by almost 19 percent compared to the corresponding period last year. Total steel tube production in the EU is forecast to grow by approximately 8.5 percent in 2011 and around 4.5 percent in 2012, according to the Economic and Steel Market Outlook 2011-2012/Q3 2011 Report from the Economic Committee of the European Confederation of Iron and Steel Industries (EUROFER).
The EUROFER report states that the positive trend could be observed in all European countries. The tube sector saw major demand due to the strong increases in Q1 2011 production in tube using sectors such as the automotive industry, mechanical engineering and metal goods. In addition, due to high global activity levels in oil and gas exploration and in drilling, real consumption of steel tubes was a driver in tube demand.
The outlook for the coming quarters in 2011 and for 2012 is that the tube sector will grow steadily. Demand for small and medium-sized steel tubes should strengthen even further owing to anticipated demand from the construction and the related steel structures sector, particularly in 2012.
Also, the outlook for the oil country tubular goods (OCTG) market and large welded tube demand remains favorable in 2011 and 2012. Oil price will remain at around $100-110 per barrel with a positive impact on pipeline construction and drilling activities. With the exception of the US which is only slightly below 2008s levels, global drilling activity (measured by active rigs) has surpassed pre-crisis highs in every region in the EU.