EU steel tube output to drop 2% in 2024
Following a milder-than-projected output decline of 1.5% in 2023, the EU steel tube sector is expected to face a more significant drop of 2% on-year in 2024. This will be followed by moderate growth of 0.8% in 2025, according to Eurofer.
The downturn in the tubes and pipes segment reflects a widespread recession affecting all major EU steel-using industries, including construction, mechanical engineering, domestic appliances, metalware, and automotive, Kallanish notes.
In the second quarter, EU steel tube output fell for the second consecutive period, decreasing by 1.6%, after a 4.4% decline in the previous quarter. This downturn has been exacerbated by war-related disruptions and ongoing supply chain issues that began in the second half of 2022. Additionally, the energy crisis that emerged in 2022 and persisted into 2023 has severely impacted investment in the sector, particularly pipeline project developments in the EU.
In the long term, demand for large welded tubes from the oil and gas sector is not expected to improve significantly as the EU shifts toward LNG shipping, reducing reliance on pipeline gas. Global oil demand is unlikely to drive new pipeline projects in the short term due to geopolitical uncertainty and a weak economic outlook, with oil demand in the EU projected to decline throughout 2024. Demand from the construction sector will also ease, contributing modestly to growth, while demand from the automotive and engineering sectors is expected to remain relatively strong, Eurofer says.
EU steel-using sectors faced a notable decline in Q2 output, which fell 2.1% after declining 2.4% in Q1. This has broken a period of resilience seen until the end of 2023, when growth was recorded at 0.9%.
Elina Virchenko UAE