Steel Pipes and Tubes Market

Market Overview

The global steel pipes and tubes market size was valued at USD 2,73.1 billion in 2022. It is estimated to reach USD 449.64 billion by 2031, growing at a CAGR of 5.7% during the forecast period (2023–2031). Increasing demand for primary energy has significantly affected petroleum exploration and production (E&P) activities, which, in turn, is estimated to boost sales of steel pipes and tubes over the forecast period. At least temporarily, the prospects of a global economic recovery from the COVID-19 epidemic were hampered by the Russia-Ukraine war. Oil and natural gas account for 25% and 10% of energy consumption in Asia, respectively.

Due to the conflict between these two nations, numerous nations are now subject to economic sanctions, commodity prices have skyrocketed, and supply chain disruptions have resulted in the inflation of goods and services, impacting numerous global markets. The need for creative and environmentally friendly building techniques is increasing along with the construction sector. Tubular construction has the potential to take a sizable market share given the anticipated rise of the prefabricated construction market. A number of seamless pipeline projects and a 40% reduction in carbon footprint have resulted from the region's rising demand for and production of gas and oil in recent years.

Steel pipes and tubes are critical components of the worldwide oil and gas sector, as well as construction, automotive, and infrastructure. These steel tubes or pipes transfer fluids, gases, and solids. They are available in various sizes and forms to meet various applications and are constructed with varying wall thicknesses according to the application's needs. These goods are utilized in the worldwide steel pipes and tubes market to construct pipelines, drill pipes, casing, and steel conduits, among other things. Steel pipes and tubes are used in many applications, including oil and gas transportation, industrial heating and cooling, fluid transfer in the chemical and pharmaceutical sectors, and structural uses in infrastructure and building projects.

Market Dynamics

Steel Pipes and Tubes Market Drivers

Increasing Hydrocarbon Demand at the Global Level

The oil and gas sector is the largest consumer of steel pipes and tubes. Steel pipes transfer gas and liquids in the oil and gas sector. They are often made of low-alloy steel or carbon steel. Inside diameter, ductility, yield strength, and pressure rating are all key aspects to consider when choosing pipes for certain purposes. Steel tubes also have wide applications in the oil and gas industry, where they are used in bearing casings, concrete pilings, and conveyor belt rollers. Tolerances, including roundness, straightness, wall thickness, and diameter, are critical when selecting steel tubes in the oil and gas industry. As the demand for hydrocarbons increases, steel pipe and tube consumption is projected to increase over the coming years, despite the slowdown caused by the emergence of the global pandemic. Moreover, increasing demand for primary energy has significantly affected petroleum exploration and production (E&P) activities, which, in turn, is estimated to boost sales of steel pipes and tubes over the forecast period.

Steel Pipes and Tubes Market Restraint

Distressed Automotive Sector

The global automotive sector is among the primary users of steel pipes and tubes. Any fluctuation or disruption in the dynamics of the automotive sector, especially in production, is projected to directly impact the global steel pipes and tubes industry. The key application segments for steel pipes and tubes within the global automotive sector include axle tubes, muffler condensation pipes, control shaft tubes, exhaust pipes, shock absorbers, and many more. The primary materials employed in automotive component manufacturing include stainless steel pipes and tubes and conventional steel pipes and tubes. The usage of the stainless category is anticipated to rise over the coming years as the product offers a unique advantage in terms of efficiency and weightage. Despite the rising content of steel in automotive vehicles, the overall dynamics of the global automotive sector are in severe distress. Reduced production of automotive vehicles is likely to directly impact or restrain the market growth of the global steel pipes and tubes industry.

Steel Pipes and Tubes Market Opportunities

Increasing Installation Capacities of Power Plants

The power generation industry is currently facing challenges concerning reducing emissions and improving plant efficiency. New technologies have been developed, as has the use of novel materials with excellent oxidation and creep resistance. There is a huge demand for boiler pipes and tubes as global energy demand is increasing incessantly. Pipes that withstand high pressure and temperatures will likely witness growing demand over the coming years. A growing population is the primary factor triggering the demand for electricity from various sources, such as hydropower plants, coal-based power plants, and other renewable sources in some cases. Hydropower generation will likely remain promising for steel pipe and tube manufacturers.

Regional Analysis

Asia-Pacific Dominates the Global Market

Based on region, the global steel pipes and tubes market is bifurcated into North America, Europe, Asia-Pacific, Central and South America, and the Middle East and Africa.

Asia-Pacific is the most significant global market shareholder and will likely depict a CAGR of 6.7% over the forecast period. The growth in energy demand is projected to be led by consumption in China and India. China currently accounts for 54% of the share in the region. However, it is anticipated to lose its share by 2040 due to the declining and aging population. Meanwhile, ASEAN countries and India will likely register robust economic growth due to their relatively young populations. Among ASEAN, Vietnam and Indonesia are projected to account for 65% of energy consumption growth combined.

Meanwhile, consumption in mature countries such as China, Taiwan, Korea, and Japan is projected to decline by the mid-2020s.x Natural gas is anticipated to represent numerous opportunities for steel pipe and tube vendors because of its environmentally friendly nature. Thus, incessant growth in energy consumption is projected to boost demand for steel and related products over the coming years.

Europe will likely exhibit a CAGR of 5% over the forecast period. The growth of the steel pipes and tubes market in Europe is relatively slow compared to other regions. This can be attributed to stagnant GDP growth, slowing crude oil production, and relatively slower growth in the petrochemicals industry. The recovery of the overall manufacturing sector in Europe, coupled with capacity additions in the region's oil and gas production, will likely drive market growth over the forecast period.

The existence of major industry participants such as BASF, INEOS, and Shell Chemicals in Europe is anticipated to complement market growth. Western Europe is expected to witness stagnant growth owing to market saturation. Steel pipes are utilized as foundation structures for offshore wind installations. Therefore, wind power represents a lucrative opportunity for steel pipes and tubes in the region. Rising offshore installations, especially in Belgium, Denmark, Germany, the Netherlands, Sweden, and the UK, are anticipated to augment the demand for steel pipes and tubes over the coming years.

North America witnessed a steady climb in the demand for steel pipes and tubes until 2019. Steel pipe demand in the United States benefited from robust economic development in 2019, fueled by government-led fiscal stimulus, resulting in high corporate confidence. This resulted in an increase in oil and gas output and increased industry activity in the region. The Industrial Production Index is an economic indicator that calculates the real output for all the facilities in the United States, including mining, manufacturing, electric, and gas utilities. As manufacturing and power plants are important end-use industries for steel pipes and tubes, the positive growth of the Industrial Production Index remained a crucial driver for the market growth.

Central and South America held a share of approximately 3% of the global market in 2019, significantly less than the share of other emerging regions such as the Middle East, Africa, and Asia-Pacific. This is mainly due to the slow economic growth of the region caused by political instability in some parts, such as Venezuela, Ecuador, Haiti, Bolivia, Honduras, and some other countries in the region. Although this is superior to developed economies, the region still lagged behind other developing economies. The average annual growth rate of the South Asia region, China, and the sub-Saharan region was 5% over the same period. These factors have resulted in a significantly lower share and slower growth in the region's market.

In the Middle East and Africa, oil and gas are the most significant steel pipe and tube applications. The Middle East and Africa are the largest oil-producing regions in the world and have a large market for steel pipes and tubes. The Middle East produces more than 33% of the world's oil. The economies of the majority of Middle Eastern countries is largely dependent on oil. For instance, the oil and gas sector of Saudi Arabia contributes roughly 50% to its GDP. However, these countries are expected to diversify their economies and move toward the service sector in the long term, which may affect the steel pipes and tubes market. As steel pipes and tubes have significant applications throughout the value chain of the oil and gas industry, steel pipes and tubes are projected to witness lucrative growth over the coming years.

Segmental Analysis

The global steel pipes and tubes market is bifurcated into technology and application.

Based on this technology, the global steel pipes and tubes market is bifurcated into seamless, electric arc welded (ERW), and submerged arc welded (SAW).

The electric arc welded (ERW) category leads the worldwide market and will likely grow at a 5.6% CAGR during the forecast period. Because of their low cost and moderate performance, ERW pipes and tubes are gaining popularity in the steel pipes and tubes business. Modern welding technologies, including high-frequency welding, are progressively integrated into making ERW pipes and tubes and play an important role in supporting sector growth. These manufacturing technological advancements have minimized seamless pipes' technical superiority over RW pipes. As a result, seamless pipes and ERW pipes have become interchangeable in some applications, such as low- or medium-temperature and pressure applications. Furthermore, ERW pipes and tubes cost at least 20% to 30% less than seamless ones. However, seamless pipes and tubes still benefit from their superior intrinsic mechanical properties.

Based on application, the global steel pipes and tubes market is bifurcated into oil and gas, chemicals and petrochemicals, automotive and transportation, mechanical engineering, power plants, construction, and others.

The oil and gas segment owns the highest market share and is predicted to exhibit a CAGR of 6% over the forecast period. The dominance of the oil and gas sector, in terms of steel pipes and tube consumption, can be attributed to diverse applications of steel pipes and tubes in the oil and gas sector, ranging from OCTG and transportation to process piping for refining crude oil into petroleum products. Furthermore, increasing demand for crude oil is predicted to boost oil and gas industry growth, which, in turn, will drive steel pipe and tube market growth in the coming years.

Recent Developments

• May 2023: Nippon Steel and Sumitomo Metal Corporation announced a merger that will make them the world's second-largest steelmakers. The resulting business will have a combined yearly sale of USD 60 billion.
• January 2023: US Steel announced the acquisition of Big River Steel for USD 1.9 billion. The acquisition would offer US Steel a significant presence in the burgeoning market for electric arc furnace (EAF) steel made from recycled scrap metal rather than traditional blast furnace iron.