1. Oil & Gas
Crude oil prices declined during Q3 2011, but remained at high levels, averaging USD 90 per barrel versus USD 102 per barrel during Q2. World oil demand continues to be strong, at over 89 million barrel per day. However, estimates for demand growth in 2011 and 2012 have been revised moderately downwards by the EIA in response to slower economic growth.
In the USA, the rig count increased during the third quarter, up 6% from Q2, up 17% since the start of the year, to reach 1,990 active rigs2 on 30 September, it remained above 2,000 rigs throughout October. Oil drilling continued to increase, notably in the shale oil fields. Approximately two thirds of all drilling activity in the USA is taking place in shale plays, and 57% of rigs operate horizontal drilling. OCTG prices continued to progress moderately during the third quarter, while distributor inventories were at 4.2 months of consumption3 at the end of September. An increase in drilling permits suggests that the rig count should continue to increase over the next quarter and OCTG demand is expected to remain at a high level entering into 2012.
In the Gulf of Mexico, the return to offshore drilling activity is progressing slowly, with the number of rigs in activity unchanged during the quarter at 33, compared to 24 at the end of 2010.
The international rig count2 continued at a high level, averaging 1,170 active rigs during Q3 2011, up 2% versus Q2. The market is well oriented as international majors and independents are still very active.
2. Power Generation
Numerous projects for conventional coal fired power plants are underway in China and India, with a large number of projects scheduled over the next 5 years. However, local competition for the supply of pipe is intense.
For nuclear power, France and China, among others, remain committed to developing their approved projects, and currently 65 plants are under construction in 16 countries1. In China, 25 plants are under construction, and while the approval process for new projects is on hold pending a security and technology review, it is expected to restart in the coming months.
3. Petrochemicals
The petrochemicals and process market continues to be active in the Middle East and Asia. Major investments in refining and gas processing are underway in China, India, Australia, Indonesia and the Middle East. The Gulf region, notably Qatar, is planning to significantly increase its petrochemical and LNG capacity. In the USA, a number of projects have been announced.
4. Raw materials
Raw material prices persisted at high levels throughout the third quarter. Although iron ore spot prices fell during October, they remain volatile as economic uncertainty increases.
Sales by market
| Q3 '11 | Q2 '11 | QoQ | Q3 '10 | YoY | 9M '11 | 9M '10 | YoY | |
| Oil & Gas | 681 | 650 | +5% | 634 | +7% | 1,961 | 1,634 | +20% |
| Power Generation | 173 | 180 | -4% | 163 | +6% | 488 | 576 | -15% |
| Petrochemicals | 100 | 100 | - | 93 | +8% | 280 | 252 | +11% |
| Total Energy | 954 | 930 | +3% | 890 | +7% | 2,729 | 2,462 | +11% |
| % of total sales | 73% | 72% | 75% | 73% | 77% | |||
| Mechanical | 161 | 169 | -5% | 116 | +39% | 471 | 298 | +58% |
| Automotive | 96 | 98 | -2% | 88 | +9% | 276 | 231 | +19% |
| Construction & Other | 95 | 93 | +2% | 95 | - | 267 | 197 | +36% |
| Total non Energy | 352 | 360 | -2% | 299 | +18% | 1,014 | 726 | +40% |
| % of total sales | 27% | 28% | 25% | 27% | 23% | |||
| Total | 1,306 | 1,290 | +1% | 1,189 | +10% | 3,743 | 3,188 | +17% |
In EUR million
