Reuters reported that Spanish group Tubacex the world's second largest maker of seamless stainless steel tube expects its output to rise 15% in 2011 on demand from the oil and gas sector.

Mr Guillermo Ruiz Longarte MD of Tubacex said that total output up 15% this year. But he declined to give absolute figures for output. Tubacex's production capacity is 52,000 tonnes to 55,000 tonnes but it is not fully used. OCTG and umbilical tubes and pipes which are used in the energy sector will be the main drivers of output growth this year and in the short term.

Mr Guillermo said that “In the rest of the portfolio we do not see, at least in 2011, a big jump. About 65% of Tubacex's output is used in the oil refining and petrochemical industries but the group plans to increase the share of value added products such as OCTG and umbilical tubes and pipes, betting on growing demand from the energy sector.”

He added that “If we take our photo today, we are very exposed to petrochemical industry but if you take our photo in 2 to 4 years, I think it will be much more balanced between upstream and downstream.”

Mr Ruiz Longarte said that “Global stainless steel market is expected to perform better in 2011 than last year, despite a slowdown in the Q2 triggered by a fall in prices of nickel a key ingredient. Nickel on the London Metal Exchange CMNI3 traded at about USD 21,925 per tonne on Friday, down about 25% since February 21 when it hit its highest for the year at USD 29,425. The metal is under pressure from expectations of higher supplies from new mines and weak stainless steel demand.”

He said that “Europe's stainless steel market could get a boost if the European Union adopts expected anti dumping measures against Chinese imports which are hurting local producers. We are confident that this action will go ahead with a significant duty over Chinese imports. This will reactivate the market.”

(Sourced from Reuters)