Global market trends: OCTG and large diameter linepipe

Transcription

1 Global market trends: OCTG and large diameter linepipe Roman Filimonov Consultant, Metal Bulletin Research s Abu Dhabi, United Arab Emirates 8 September 2014

2 INTERNATIONAL STEEL TUBE & PIPE FORUM - SEPTEMBER Contents MBR s new Tube and Pipe Group Global OCTG market trends and implications for Middle East Global large diameter linepipe market overview

3 INTERNATIONAL STEEL TUBE & PIPE FORUM - SEPTEMBER Contents MBR s new Tube and Pipe Group Global OCTG market trends and implications for Middle East Global large diameter linepipe market overview

4 MBR s TUBE AND PIPE TEAM A new team with a familiar face Americas: Kim Leppold Kleppold@metalbulletinresearch.com Tel: Europe/MENA/Asia: James Ley James.ley@metalbulletinresearch.com Tel: CIS: Roman Filimonov Roman.filimonov@metalbulletinresearch.com Tel: Metal Bulletin Research, Nestor House, Playhouse Yard, London, EC4V 5EX UK

5 MBR S TUBE AND PIPE TEAM New tracker reports published by the Tube & Pipe team Industrial and Structural Tube & Pipe Market Tracker, covering the market for HSS, mechanical tubing, precision tubing and standard pipe Re-launched the Seamless OCTG & Linepipe Market Tracker and the Welded OCTG & Linepipe Market Tracker. I have read your trackers, this is really good stuff. - Industry association The new Seamless OCTG & Linepipe tracker has brought global OCTG analysis to a whole new level. - Pipe division, Duferco

6 INTERNATIONAL STEEL TUBE & PIPE FORUM - SEPTEMBER Contents MBR s new Tube and Pipe Group Global OCTG market trends and implications for the Middle East Global large diameter linepipe market overview

7 GLOBAL OCTG MARKET TRENDS AND IMPLICATIONS FOR MIDDLE EAST The Global OCTG market has recovered from its 2009 lows driven by growth in all four major markets: North America, China, CIS and MENA welded now has just under a 30% share Global OCTG consumption by region and type (kt) Mt CAGR = 13% 17.4Mt % 24% 31% 31% 27% North America China CIS MENA South East Asia Other Africa South America Europe Seamless Welded Source: MBR

8 GLOBAL OCTG MARKET TRENDS AND IMPLICATIONS FOR MIDDLE EAST The US market is unique with its high percentage of ERW usage Global OCTG consumption by region in 2013 CIS 2.4Mt N. America 6.6Mt Europe 390 kt China 4.1Mt S. America ` 1Mt ` MENA 1.5Mt India, SEA & Australasia 970 kt Welded OCTG Seamless OCTG Africa 360 kt Total shipments ~ 17,400 kt Source: MBR

9 GLOBAL OCTG MARKET TRENDS AND IMPLICATIONS FOR MIDDLE EAST There is no shortage of OCTG capacities worldwide Estimated OCTG capacities by region in 2013 (kt) N. America 8 Mt Europe 1.9 Mt CIS 3 Mt China 12.8 Mt Welded OCTG S. America 2 Mt ` ` Africa 100 kt Middle East 1.2Mt Other Asia 4 Mt Seamless OCTG Source: MBR Total capacity = 32Mt

10 GLOBAL OCTG MARKET TRENDS AND IMPLICATIONS FOR MIDDLE EAST European capacity is nearly 5 times of the demand within its region however because of the absolute capacity size in China this is the global threat Ratio of Installed regional capacity to regional demand 4.9 Europe 4.1 India, SEA and Australia 2.9 China 2.0 S.America CIS N.America 0.8 MENA 0.3 Africa Source: MBR

11 GLOBAL OCTG MARKET TRENDS AND IMPLICATIONS FOR MIDDLE EAST USA and Middle East are two largest import markets with net imports accounting for 2.9Mt and 1.5Mt accordingly 2.9Mt 1.5Mt ` ` Source: MBR

12 GLOBAL OCTG MARKET TRENDS AND IMPLICATIONS FOR MIDDLE EAST S.Korea was the largest supplier the USA followed by combined Europe and Canada Major OCTG exporting regions to the USA in kt 160kt 240kt 2.9Mt 140kt ` ` 370kt 140kt 890kt Source: ISSB and MBR

13 GLOBAL OCTG MARKET TRENDS AND IMPLICATIONS FOR MIDDLE EAST China provided over 30% of OCTG imports into MENA region followed by Europe and Japan 135kt 327kt 1.5Mt 290kt 520kt ` ` 38kt 61kt Source: ISSB and MBR

14 GLOBAL OCTG MARKET TRENDS AND IMPLICATIONS FOR MIDDLE EAST There s been a lot of pressure on Middle East prices from China and anywhere else 3000 Regional prices for casing with premium connections, $/tonne Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 USA P110 premium ME L80 premium W.Europe L80 premium Japan L80 premiun China P110 premium Source: MBR

15 GLOBAL OCTG MARKET TRENDS AND IMPLICATIONS FOR MIDDLE EAST While OCTG imports are perceived as a threat to the domestic market, can the USA export its shale drilling technology (new threading/stock facilities) to other parts of the world? The global development of shale drilling outside the USA in 2014 UK- Ukraine crisis could push the UK and others in Europe quicker into shale drilling, although several political and environmental constraints remain Saudi Arabia exploring and appraising shale gas resrves in the Empty Quarter, NorthWest/Red Sea and South Ghawar Russia Rosneft and BP sign agreement to develop shale oil in the Volga region China Sinopec/CNPC now developing Fuling field first commercial shale field coming into operation Argentina - Vaca Muerta one of the worlds largest shales both oil + gas. Chevron working here with YPFSA Source: MBR India OGNC started drilling exploratory wells for shale gas planning to drill 30 in the next 2 years Australia - Chevron, Conoco, Statoil, Total, BG and Hess now investing over $1,5bn in shale gas drilling in Australia

16 GLOBAL OCTG MARKET TRENDS AND IMPLICATIONS FOR MIDDLE EAST Domestic US capacity growth could lead to even higher competition in the Middle East Up to 4.2Mt of new OCTG capacity slated for US market Company Location Type Product '000 tons start-up Vallourec Star Youngstown, OH seamless OCTG Welded Tube of Canada Lackawanna, NY ERW OCTG OMK Houston, TX ERW OCTG OCTG/Linepipe/Struct EnergeX Blytheville, AR ERW ural Borusan Baytown, TX ERW OCTG Prolamsa Bryan, TX ERW OCTG/Linepipe/Struct ural California Steel Industries Fontana, CA ERW Linepipe/OCTG Halo Steel Pipe McCleary, WA ERW OCTG Benteler Caddo, LA seamless OCTG/Linepipe/other Alita USA Buffalo, NY ERW OCTG PTC Hopkinsville, KY seamless OCTG Tejas Tubular Norfolk, NE seamless OCTG TPCO Gregory, TX seamless OCTG Tenaris Bay City, TX seamless OCTG Source: MBR

17 INTERNATIONAL STEEL TUBE & PIPE FORUM - SEPTEMBER Contents MBR s new Tube and Pipe Group Global OCTG market trends and implications for Middle East Global large diameter linepipe market overview

18 GLOBAL LINEPIPE OVERVIEW Global LSAW mills utilisation rates have dropped sharply in 2013 due to there being very few MEGA projects in the market Global LSAW production by region (kt) Global LSAW capacity by region (kt) 12, ,000 CAGR = -3.3% CAGR = 6% 8, , , , North America South America Middle East Africa CIS Europe Asia ex China China North America South America MENA CIS Europe Other Asia China Source: Company interviews and MBR estimates

19 GLOBAL LINEPIPE OVERVIEW HSAW market didn t suffer to the same extent as LSAW Global HSAW production by region (kt) Global HSAW capacity by region (kt) Mt CAGR = -1.2% CAGR = 5.5% 6.3Mt North America South America Middle East Africa CIS EU Other Asia China China Other Asia CIS EU MENA North America South America Source: Company interviews and MBR estimates

20 GLOBAL LINEPIPE OVERVIEW Middle East is almost 50/50 split between HSAW and LSAW for largediameter linepipe applications Market split between LSAW and HSAW consumption in each region in 2012 (kt) North America South America EU Middle East CIS China Other Asia HSAW LSAW Source: MBR

21 GLOBAL LINEPIPE OVERVIEW The global large OD linepipe market is rapidly picking up into 2014 Major large OD linepipe projects 2014 onwards South Stream*- Giant Russian pipeline some 3.2Mt offshore across the Baltic Sea brining gas to Southern Europe currently being delayed by EU Russia Giant gas deal signed with China. Power of Siberia pipeline moving ahead (2.5Mt). Altai pipeline could follow (2Mt) Greece/Italy - TAP Final part of South Caucus pipeline. 470kt of LDP will be needed here Turkey - TANAP connecting into the South Caucus extension (300kt of LSAW) Azerbaijan 1.2Mt large-diameter pipeline across the whole of the country to Greek border Source: MBR Iraq* 1Mt pipeline to Jordan was in planning, current political situation likely to delay this China Number of pipelines underway including 3 rd & 4 th Central Asia-China and at least 1Mt of CNPC network connecting to Russian gas Japan Sakhalin Japan pipeline now in serious discussion to connect to Russian gas network

22 GLOBAL LINEPIPE OVERVIEW Strengthening demand for LSAW into H is forecast to lead to a gradual global strengthening in prices 2,200 Global historic and forecast LSAW pipe prices by region ($/tonne) 2,000 Forecast 1,800 1,600 1,400 1,200 1, Q Q Q Q Q Q Q Q Q US LSAW linepipe Japan LSAW linepipe W. Europe LSAW linepipe China LSAW linepipe Source: MBR

23 INTERNATIONAL STEEL TUBE & PIPE FORUM - SEPTEMBER Thank you for your time Roman Filimonov Consultant - Tube and Pipe Group Metal Bulletin Research tel: roman.filimonov@metalbulletinresearch.com