World UEO Steel Pipe Supply to Get Short

Supply of UOE shaped large diameter steel pipe is expected to get very tight after 2008 even more than current tight condition due to coming major natural gas pipeline projects worldwide. Japanese 3 major makers including Nippon Steel, JFE Steel and Sumitomo Metal Industries have limited output capacity when they supply products for strong domestic demand including expansion of Haneda airport, which requires 100,000 tonnes of UOE pipe. However, the largest problem is to secure material plate under the tight supply. UOE pipe demand is firm with natural gas pipeline projects with several tens of thousands tonnes of consumption in fiscal 2006 ending March 2007 though there are no major projects with more than 300,000 tonnes of consumption. Japanese 3 major makers have no additional capacity to get new order through first half of fiscal 2007. The supply is expected to keep tight under strong demand. Major pipeline projects will start in Europe, China and Canada in and after 2008. NordStream pipeline from Russia to Germany uses around 2.4 million tonnes of pipe. Troll field pipeline from Norway to Europe uses 700,000-800,000 tonnes. Second phase of West-East pipeline from Hsinchiang Uighur to Fuzhou, Shanghai and Guangzhou uses 2.6 million tonnes including 1.6 million tonnes of UOE pipe. Mackenzie pipeline from Mackenzie delta to Alberta in Canada uses 500,000 tonnes.UOE pipe supply is expected to be serious tight when the high grade UOE suppliers are limited to Japanese major 3 and Europipe. Export price of UOE large diameter pipe keeps more than FOB US$ 1,000 per tonne. Under the tight supply, the price could increase more.