How did the tube and pipe industry perform in 2020, and what's next
How did the steel tube market fare in 2020? What should we expect in 2021? We will try to answer these questions by reporting the authoritative point of view of the German Steel Tube Association.
After a promising start into 2020, economic activity was sharply reduced in many countries because of the Covid-19 pandemic, which began to have an impact in March. Global energy demand fell significantly because of the lower demand from consumers in the industrial and transport sectors. Consequently, there was an oversupply of oil and gas with world market prices falling accordingly. As steel tube production continues to be determined to a considerable extent by demand from the energy industry, in particular from oil and natural gas producers and processors, many tube manufacturers experienced significant declines in output. Other major customer sectors, such as machinery and plant engineering, the automotive, and the chemical industry, also purchased significantly lower volumes than usual. Demand from the construction industry remained relatively stable. Overall, the production of steel tubes in 2020 was significantly lower than a year earlier.
After reaching an all-time high in 2019, the global steel tube production in 2020 fell back to the level of 2012, at around 151 million tons. In the EU, production fell from 14 million tons to 11 million tons. If we take the German situation as an example, German steel tube production was around two million tons in 2020. In 2018, Germany produced more than three million tons of steel tubes.
2021 outlook for steel tubes
During the first half of the year, the effects of the Corona pandemic should subside and lead to a significant economic recovery in the second half of 2021. The upward trend in raw and input material prices since Q4 2020 and the significant upward trend in freight rates already anticipate this trend. The steel tube industry is likely to benefit from the expected recovery of its customer markets.
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