OREANDA-NEWS. March 26, 2010. Leading producer of seamless stainless steel tubes & pipes Centravis Holding analyzed development trends of seamless stainless steel tubes & pipes world market in January-February current year.

Raw materials

According to analysts of the company, in January-February stock market value of raw materials was differently directed. The main reason for raw materials cost reduction became expectation of nickel demand decrease among Asian steel companies, and rise in nickel prices was caused by speculative sentiment, driven by announced improvements in key indicators of global economies, increasing appeal of the stock markets for investment funds. Moreover, rise in prices was associated with growth in nickel demand in the first half of 2010.

The main influence on the stock metal price quotations next months will have growth in nickel demand from stainless steel companies. Thus, growing demand for stainless steel at Chinese market is forcing stainless steel production to increase capacity utilization (at the beginning of February, it was 85-90%). Capacity utilization, market-oriented to Chinese market manufacturers from Taiwan, South Korea and Japan reached in February 80-85% and keeps growing in the second quarter of 2010.

Gradual increase in purchasing activities is observed at European market, therefore the companies in late January — early February increased their capacity utilization to December level — 60-70%. According to experts of the company, European producers of raw materials in the first half slightly increase austenitic stainless steel melts. Seasonal increase in demand for stainless steel rolled products in major regional markets will contribute to consolidation of nickel average quotations in the second quarter.

Analysis of world prices for seamless stainless steel tubes & pipes

Prices for stainless steel seamless tubes & pipes in December and January tended to decrease. The fall in nickel prices as well as business slowdown during the holidays influenced fall in prices for seamless stainless steel tubes in all regions. In Europe, prices on average fell by 4% in America by 2%, while in Asia remained relatively stable.

Analysis of seamless stainless steel tubes & pipes market in CIS countries

According to experts, consumption of seamless tubes & pipes in Russia in December increased by 15% -20%. Following results of the last year, estimated consumption was about 13.4 tons that is 44% lower than in 2008.

Demand for seamless stainless steel tubes & pipes in January was low — consumers refrained from purchasing of products became more expensive after import duties introduction, also influenced overall business slowing down. In general of seamless stainless steel tubes & pipes market in Russia in January-February remained relatively balanced. But since March trading companies to meet the increasing demand and replenishment will be forced to increase significantly purchasing of imported products.

Head of Strategic Marketing Dept. CJSC “Centravis Production Ukraine” Eugenyy Alekseenko, commented on the trends in Russian market: “In the next future we expect slight increase in cost of products from storage companies (maximum by 2%). Products of import manufacturers will increase more significantly. This is mainly due to the growth in prices by Chinese suppliers and import duties effect.