TEX reported that the Stattman project, the oil and gas development project in the Barents Sea which Statoil, Total and so on are proceeding with is certain to be deferred for one year. As drop of demand on energy in the European area is forecasted due to the sovereign risk in Europe, subsequently, energy related development projects in Africa and Asia as well are likely to delay.
For this reason, in relation to steel, it will affect largely UO pipe businesses. From the previous quarter, prices of various steel products are showing the downward tendency but among them, demand on UO pipes was steady, and their prices was rising even a little because development projects of both oil and gas had still been undertaken due to the momentum of review worldwide on the plans of nuclear power plants.
However, prices of UO pipes are moving to drop same as prices of other steel products at this point. As energy development stopped in the European area, production capacity of the UO pipe facilities of the European mills is said to be enough. If so, it is foreseen that movement to fill their capacity even at cheaper prices appears, and its prices are collapsed.
In Europe, ILVA of Italy is said to have a sign to sell UO pipes aggressively. As Europipe is said to have gotten a preliminary contract from Australia, the company has secured certain quantity of them but it seems to go on an offensive for export negotiations in the Asian area as well as ILVA due to uncertainty in future.
Meantime, as for oil country tubular goods, both prices and demanding quantity are stable. The number of oilrigs in operation in USA is 2,013 this week, slightly down 10 rigs from the previous week. It is because as in the wide area, drillings are operated, large quantity of OCTG is consumed, and therefore, demand is still steady. With this, there is no movement that any mill is going to secure quantity even reducing its price in USA.
( Source: www.steelguru.com )