Demand for seamless pipes in the Italian market currently remains rather weak. Nevertheless, European seamless pipe mills are not just waiting around for improved economic conditions but are trying to profit from the imposition of duty on Chinese seamless pipes (For reference, the duties in question have been raised to 39.2 percent from the initial 27.2 percent, will last for five years and cover a wide range of the tubular products produced by Tenaris). European seamless pipe manufacturers hope that the measures against Chinese material will allow the re-establishment of fair market conditions in Italy and Europe, especially considering the current low level of demand in the market.
Tenaris' results in the third quarter reflect weak demand for their products from their customers in nearly all regions, though sales in the Middle East and Africa registered a modest year-on-year increase. Shipments of tubular products fell 50 percent year on year and 16 percent quarter on quarter. Demand for European seamless pipes this year has been affected by the decline in oil and gas drilling activity and by the actions taken by customers to adjust to reduced cash flows and a less favorable market outlook.
European seamless pipe demand will be poor in the coming weeks as 2009 draws to a close. Market participants do not expect to see much business in December due to the approach of Christmas and the New Year holidays and, consequently, seamless pipe producers in Italy and Europe may decrease their prices in the coming period. For the time being, European producers are trying to maintain their official price lists at unchanged levels, but it is possible to obtain a five-to-seven percent discount for firm orders. Meanwhile, import offers of seamless pipes have decreased by €40-50/mt over the past month.
Officially, domestic prices for November production Italian seamless pipes of 2"-5" size grade B as per ASTM A106/API 5L are at about €920/mt ex-works, while prices for 6"-8" pipes are at around €1,050/mt ex-works. However, with current discounts, actual prices may go down to €860-880/mt ex-works for 2"-5" pipes and to €980-1,000/mt ex-works for 6"-8" pipes.
Export quotations of November production Italian seamless pipes of 2"-5" size grade B as per ASTM A106/API 5L are at €890-950/mt FOB, while quotations for 6"-8" size are at €1,010-1,080/mt FOB.
November-December production Ukrainian 2"-6" seamless pipes ex-Interpipe grade B as per ASTM A106 are offered to the Italian market at around €600-640/mt DDU, while offers for 8"-12" seamless pipes are at €670-710/mt DDU (25.1 percent AD duty is not included in either of these price ranges).
Seamless line pipes from Russian producer TMK have been offered to the Italian market at around €660-700/mt DDU (27.2 percent AD duty not included) for common specifications. Seamless water & gas pipes of 1"-4" size grade S195T as per EN 10255 from Pervouralsky Novotrubny Works (CHTPZ Group, Russia) are offered to Italy on average at €700/mt DDU for January production (24.1 percent AD duty not included).
Prices for January production Czech origin seamless steel tubes for boilers (ArcelorMittal Ostrava) up to 10" made to EN 10216 are at about €840/mt, including delivery inside Italy.