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EUROFER sees another tough year for EU Steel tube industry

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BRUSSELS (Scrap Register): In 2019 and 2020, business conditions for the steel tube industry in the EU are expected to remain rather difficult, the European Steel Association EUROFER said in its latest report.

The outlook for demand for large welded tubes is expected to remain uncertain, the association noted.

There has still been no decision on the route of the Nord Stream 2 project through territorial waters. While work on the Nord Stream 2 pipeline is ongoing in Russia, Finland, Sweden and Germany, the route through Danish international waters is still waiting final approval by the Danish authorities. The amended Danish Continental Shelf Act entered into force with retroactive effect. The law gives the Danish authorities the right to veto infrastructure projects running through territorial waters; such a judgement has now been pending for 16 months. If, in due time, approval were to be granted, it remains to be seen to what extent EU-based large tube manufacturers will benefit, the report said.

Demand from other smaller projects exists, but is not significant enough to provide a significant boost to production activity, EUROFER said.

Meanwhile, demand from the other steel tube market segments is also facing more challenges than before. With the exception of the construction sector, demand from most downstream customers of medium-sized and small welded tubes as well as seamless tubes is expected to cool down as well. This will be particularly felt in 2019 owing to a fall in production activity in the automotive and metal goods sector.

Moreover, import pressure on steel tube markets in the EU will remain high. Business conditions in 2020 are forecast to become somewhat more supportive to steel tube demand again.

Total steel tube output in the EU is expected to fall by 0.2% in 2019 before growing by 1% in 2020, the report said.

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