2023 China's seamless steel pipe export momentum "still strong"

First, analysis of seamless steel pipe exports in recent years

1, 2022 seamless steel pipe exports accounted for 17.5% of production

From the perspective of China's seamless pipe exports in recent years, since 2014, the export volume of seamless pipe has been basically at the level of 4 million tons, but in 2020, due to the impact of the new coronavirus epidemic, the export volume of seamless pipe has declined "cliff-like", and then seamless pipe exports have gradually rebounded. In 2022, the rise in international energy prices led to an increase in investment, and seamless steel pipe exports returned strongly, reaching 4.9011 million tons, accounting for 17.5% of domestic seamless steel pipe production. In view of the good performance of the export of seamless steel pipes in the first half of 2023, the export of seamless steel pipes in 2023 still maintains a good momentum, and it is expected that exports will remain at the level of 4.5 million tons in 2023, when it will account for 16.4% of domestic seamless steel pipe production.

In recent years, on the one hand, by the domestic seamless steel pipe prices continue to rise, on the other hand due to the domestic seamless steel pipe in the international high-end seamless steel pipe use field performance, seamless steel pipe export average price showed an upward trend year by year. Due to the sharp decline in domestic steel prices in 2023, the average export price of China's seamless steel pipe fell to $1518.70 / ton from January to June. Overall, in recent years, China's seamless steel pipe export situation has shown a "volume and price rise" trend.

2, oil and gas related seamless steel pipe accounted for a significant increase in exports

From the perspective of the types of seamless steel pipe exports in 2023, the seamless pipe exports of oil and gas pipelines are 1099372.695 tons, accounting for 36.68%; Oil and gas drilling seamless pipe exports 876,710.635 tons, accounting for 29.25%; Geological drilling sleeve seamless pipe exports 8713.946 tons, accounting for 0.29%; Boiler tube outlet 133076.832 tons, accounting for 4.44%; Other seamless pipe exports 879728.526 tons, accounting for 29.35%. Among them, oil and gas related seamless steel pipes accounted for 65.93%, which was the most important component of seamless steel pipe exports.

From the perspective of the export situation of seamless steel pipes by varieties from 2022 to 2023, the most significant export increase in the second half of 2022 and the first half of 2023 is still oil and gas related seamless steel pipes, of which oil and gas drilling seamless pipe export growth is the most significant. However, from the perspective of the sequential change, due to the base effect and the impact of energy-related investment peaking, the total export volume of oil and gas related seamless steel pipes in the first half of 2023 continued to remain high compared with the second half of 2022, but the growth rate declined significantly. From the data combined with overseas demand, it is expected that the export volume of seamless steel pipe will continue to increase in the second half of the year, but it can still maintain a certain volume.

3, China's seamless steel pipe exports to Kuwait and other countries increased significantly

Over the years, the Middle East and Southeast Asia are the main countries of China's seamless steel pipe exports, from the 2023 export top10 countries, respectively, Kuwait, Thailand, Turkey, the United Arab Emirates, India, Iraq, Indonesia, South Korea, Oman and Egypt. In 2022, international energy prices have risen sharply, and China's exports to Kuwait, the United Arab Emirates, Egypt and other countries have increased significantly, with an increase of 193%, 114%, 150%, of which Kuwait has increased significantly and has become the largest country importing China's seamless steel pipes. In 2023, China's seamless steel pipe exports are still dominated by the above countries, but the countries with higher export growth rate have turned to Turkey, Iraq, Indonesia and other countries, with an increase of 65%, 48%, 46%, respectively.

Second, China's seamless steel pipe export impact and correlation analysis

1. China's seamless pipe export volume and crude oil price trend

Since 2020, the Russia-Ukraine conflict and currency overshoot have made energy prices rise rapidly, with crude oil prices more than doubling in the first half of 2022, and energy prices still maintaining a high level in 2023. At present, the global energy industry profits to maintain a high level, energy exploration investment has remained high, it has also been mentioned that the export of seamless steel pipe mainly oil and gas related pipes, so the global demand for seamless steel pipe has been maintained at a high level. It can also be seen from the figure above that crude oil prices and seamless steel pipes maintain a strong positive correlation, which is also one of the core factors that 2023 China's seamless pipe exports can maintain "high progress".

2, the RMB exchange rate and China's seamless export situation

Beginning on March 16, 2022, the Federal Reserve officially announced an interest rate hike, indicating that the era of global epidemic easing has officially come to an end, and the dollar index has continued to bull. This year, the RMB continued to depreciate, the recent exchange rate appreciation of about 7.2, from the currency exchange rate and seamless pipe export trend can be seen, the two show a high negative correlation. In the second half of the year, the RMB exchange rate or maintain a certain high level, which has a certain positive stimulus effect on China's seamless steel pipe exports.

3, 2023 seamless steel pipe international trade friction

China's seamless steel pipe over the years is the focus of other countries trade protection object, in 2023 countries to China's exports of seamless steel pipe trade friction time a total of 7, but most of the anti-dumping sunset review investigation, new countries to China's exports of seamless steel pipe trade tariffs added little, the overall impact of the level of previous years.

4, in the first half of 2023, overseas seamless pipe production enterprises are doing well

Looking at the second quarter results of Tenaris S.A., after paying a dividend of $401 million in May 2023, the net cash position increased to $2.3 billion as of June 30, 2023. Sales in the first half of 2023 increased by 59% compared to the first half of 2022, due to a 30% increase in shipments of pipe products and a 26% increase in average selling prices, while sales in other businesses decreased by 2%. Along with the increase in sales, EBITDA also doubled due to improved margins, as higher prices for pipe products offset a 12% year-over-year increase in unit cost of sales.

Third, China's seamless pipe export analysis in the second half of 2023

From the international situation: According to some overseas companies, in the Americas, the number of new drilling in the second half of the year or will decline, but in the Eastern Hemisphere, drilling activities will continue to increase, especially in the Middle East and offshore operations. Most companies expect oil and gas related seamless steel pipe sales and profit margins to decline significantly in the second half of the year. However, China's exports of seamless steel pipes are mainly in Southeast Asia and the Middle East, although the impact is not much.

From the domestic situation: the price of seamless steel pipe continues to fall in the second half of the year, but this will be conducive to the export of seamless steel pipe; The high level of yuan interest rates also has a positive effect on commodities. From the perspective of enterprises, most enterprises have done a good job in the second half of the year exports slightly cooling level, the goal is not lower than the level of last year.

Overall, the second half of the overseas seamless steel pipe demand or will still be a certain strength, but perhaps less than the level of the first half of the year, considering all factors, it is expected that the total domestic seamless steel pipe exports in 2023 or 4.5-4.7 million tons slightly lower than the level of 4.9011 million tons in 2022, the export situation is still strong.