Russian steel pipe output falls 3.3% in 2012

Steel pipe output in Russia was down by 3.3% year-on-year in 2012 to 9.7 million tonnes, according to recent data from the Federal Statistics Service (Rosstat).

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In December, however, output was up by 20% year-on-year and 8.8% higher month-on-month, Rosstat said, but it did not reveal specific figures.

Total steel pipe production volumes in 2012 were dragged down by lower demand for the large-diameter pipes (LDP). The decline came because state-run gas monopoly Gazprom, the product’s principal buyer in the country, had finished various earlier projects and had not started any new ones.

In October, however, Gazprom announced the start of the second stage of its Eastern Gas Programme, whose main project is the construction of a 3,200km gas pipeline from the huge Chayanda gas field in Eastern Siberia to the Far East port city of Vladivostok.

The pipeline is to be launched in late 2017.

In early December, Gazprom started the construction of South Stream, designed to transport Russian gas to southern and eastern Europe. The first gas supplies through the pipeline, whose offshore section will stretch for 900km across the Black Sea, are scheduled for late 2015.

In 2013, Russia’s consumption of LDP is expected to rise by 11% to about 2.1 million tonnes, from 1.9 million tonnes last year, according to analysts at Sberbank Investment Research.

The forecast figure is tentative, however, as it will depend on Gazprom’s purchasing schedule.

LDP demand in Russia is expected to rise further to 2.5 million tpy in 2014 and 2015 due to the construction of the South Stream and Chayanda-Vladivostok pipelines, Sberbank said.

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