Pipe and Tube Market Review
June 2023
On a regular basis we provide relevant information about developments in the steel market and the effects they will have on prices and availability of pipe and tube material.
Steel market developments June 15, 2023
The upward trend of the first quarter of this year has not continued. The expected increase of steel demand in China after ending the severe lockdown measures did not materialize. On the contrary, overcapacity of Chinese steel mills is flowing into Europe, putting pressure on EU price levels. Adding to this pressure is the increased steel supply of European mills after restarting idled capacity. Moreover, technical production problems at certain TATA and Arcelor mills will soon be over, leading to even more steel output.
In our March report we already mentioned there is no structural increase in steel demand. The upward trend of the first quarter was a consequence of delayed orders from stockists and service centers and lower production volumes due to the earthquakes in Turkey. These volumes seem to have recovered in the meantime.
The economic climate in Europe has cooled down rapidly. Because inflation and interest rates keep going up, investment plans are often delayed or even cancelled. Some positive news comes from the automotive and energy markets, especially for renewable energy related projects.
Because the increased steel offer is not absorbed by an equally increased demand, the pressure on prices is big. Therefore, hot rolled coil prices are decreasing since April, as can be seen in the graph below.
Price development of hot-rolled coil
Price developments of scrap
Price developments carbon steel products
Due to the above mentioned developments, the price level for cold formed welded tubes (circular, square and rectangular) went down. As demand is slow and hot rolled coil prices are expected to decrease further, we expect the downward price pressure on welded tubes will continue in the near future.
Mills of hot formed seamless tubes are back in fighting mode to fill their capacity, although their actual order books are still good. As a consequence of the reduced energy prices, which have a big influence on these tubes, prices decreases can be expected. However, several mills claim to have closed fixed energy contracts in a time when availability was key. Nevertheless, we have monitored the first price decreases here too.
The downward price levels also have their effect for fittings and flanges. Both in China and in Europe, the pre-material prices have gone down. Pre-materials for fittings and flanges can be tubes, billets, plates or sheets.
Availability and delivery times
Slow demand and increased production capacity have reduced the delivery times for welded tubes. The delivery times for seamless tubes, fittings and flanges has remained unchanged.
The availability of transport is not an issue anymore. Container seefreight costs remain stable, the cost for truck transport is slightly decreasing.
P. van Leeuwen Jr’s Buizenhandel B.V.
Zwijndrecht, Netherlands
T +31-78-6252525