According to the Economic and Steel Market Outlook 2016-2017/Q3 2016 Report from the Economic Committee of the European Steel Association (EUROFER), EU steel tube production fell by 6.8 percent year on year in the first quarter of the current year, reflecting the continuation of difficult market conditions across the key market segments for steel tubes in the EU as well as abroad.
The EUROFER report said that, with oil prices still generally below what producers need to generate satisfactory returns on investment, oil and gas exploration and production activity has faltered. As a consequence, international demand for large welded and oil country tubular goods has remained subdued. Meanwhile, global overcapacity in steel tube production has resulted in more fierce competition in most tubes markets. Some tube markets benefit from stable or even improving business conditions, such as tubular products for automotive applications.
The outlook for the remainder of 2016 and for 2017 is for steel tube production to gradually climb back to somewhat higher production levels, although even at the end of next year output is forecast to remain 30 percent below the 2008 production peak.
EUROFER expects that EU production of steel tubes will rise by 1.1 percent in 2016 and by around 5.5 percent in 2017.