In turbulent times, tubes and pipes roll with the punches

Outlook

It can be quite depressing when the pundits start talking about overproduction, deindustrialization and Europe. The Old Continent’s industries are faced with mounting fuel prices and increased competition from China and other Asian countries. But whereas European steel market is in crisis, the stainless-steel tube and pipe industry is buoyant, even in Europe: the sector is projected to show a CAGR of 4.8% between 2023 and 2034(1). Oil & gas, food & drink, auto and infrastructure (including water pipes) are the sectors that account for most of the demand. In Europe, green energy and decarbonization will be an important growth area as the world moves towards net zero.

Investments

The buoyant mood of the stainless tube & pipe sector can be gauged by the number of capacity additions currently under way. To meet increasing demand for remelted high nickel and stainless steel and tubes, Alleima is installing a fourth VAR furnace at Sandviken, to expand production of nickel alloys and grades such as Sanicro® 625 and Sanicro® 925 for aerospace, medical and oil & and gas. Marcegaglia UK has announced it will offer electro-welded stainless-steel tubes (mainly in type 304) at its Oldbury site. In the USA, Global Seamless Tubes & Pipes will establish its first US production facility in north-west Louisiana, catering for the engineering, oil & gas and power generation sectors. Tube maker Corrosion Resistant Alloys has just completed a manufacturing facility in Brenham, Texas. A Turkish subsidiary of Taiwan’s YC Inox has increased capacity for its stainless-steel pipe output. In 2024 India’s Viraj Profiles inaugurated its advanced Piercer Mill at its new stainless-steel seamless pipe plant. In the UAE Raccortubi opened a warehouse to serve the oil & gas industry.

Markets

Oil & gas in fact remains the no. 1 client of stainless-steel tubes and pipes. This would probably be true even if President Trump had not vowed to “drill, baby, drill”. The US president has revoked his predecessor’s bans of drilling and fracking on federal lands and in coastal waters. The deepwater sector is likely to increase sharply, requiring stainless steel tubes to bring the hydrocarbons from sea level to surface. Several contracts have been signed or renewed. Petrobras has signed a contract with Tubacex for supplying its offshore fields in Brazil. Tubacex has also been awarded API Spec Q1 certification for a manufacturing plant in Abu Dhabi. Nippon Steel and Sumitomo renewed a long-term contract with Equinor to supply OCTGs and for carbon sequestration & storage projects. The National Oil Company of Abu Dhabi renewed its contract with Vallourec. Tenaris continues to supply Exxon Mobil, while Alleima won two major awards for tubes, OCTGs and umbilicals. The same company has launched its duplex grade SAF™ 3007 for enhanced performance of umbilicals in tough deepsea conditions. CCUS (carbon capture, utilization and storage) is a growing industry important for stainless tubes and pipes. This umbrella term covers a multitude of activities designed to curb CO₂ emissions. The sector is being massively subsidized by governments as they strive to achieve zero carbon emissions by 2050.

Aiming high

Walsin Lihwa, a Taiwanese producer of stainless-steel long products, has been on a buying spree, through its Italian subsidiary Cogne Acciai Speciali (CAS), a European leader in stainless steel bars and wire rods.

Walsin acquired CAS in 2022, and a year later CAS acquired two rolling mills in Sweden from Outokumpu to penetrate North European markets. In the same year it bought UK-based Special Melted Products, a manufacturer of specialty steels and nickel-based superalloys used in critical applications. CAS continued to aim high with its acquisition of Inox, a stainless-steel and nickel-alloy recycling company. And in November of last year the Italian company acquired Mannesmann Stainless Tubes Group (MST) from the Salzgitter Group. (Its name has been changed to “DMV”.) All in all, a resounding vote of confidence in the higher end of the stainless steel and CRA sectors, in vertical integration and in global presence.

Several projects are under way: a feasibility study is being conducted by Petronas and several stainless-steel producers to develop technologies designed to curb emissions in the Tokyo Bay area through CO₂ capture, storage and liquefaction. Various forms of recycling CO₂ have recently been developed. Also, direct air carbon capture and storage, which consists of extracting CO₂ from the air and storing it underground, received a boost after the commissioning of the Mammoth project in Iceland. However, the consensus is that industry will need to quadruple in size if climate targets are to be met.

CO₂ handling can be quite corrosive because of the combination of water and chlorides. If salt is present in the water, it is necessary to use 316L or a higher grade. CRAs such as duplex stainless steel and nickel alloys are being applied in capture plants and CCUS projects. Stainless steel is applied to the compressors and tubing of injection wells. The need to curb emissions is driving innovation: for example, Tubacex has introduced Sentinal® Prime, a connection technology for OCTGs, which can be used in deepwater oil & gas, CO₂ storage and hydrogen. Choosing the right materials for CO₂ handling is a complex affair, which is why there is still no unified set of standards for CCUS infrastructure.

Hydrogen, along with its derivative, ammonia, is an essential tool for curbing emissions. It can be produced when energy supply exceeds demand and used as a fuel when demand exceeds supply. It is therefore an ideal storage device in combination with wind and solar, and one can expects its use to increase with the growth of green energy. According to a recent survey (2), this is a dynamic market, with a CAGR of 7.8% between 2025 and 2050. Storage and transportation normally require hydrogen to be liquified, which means lowering the temperature to -253°C. This requires the use of austenitic stainless steels that combine ductility and energy absorption, such as 316L and 316LN.

The “greenest” hydrogen comes from electrolysis, with power sourced from renewal energy. Up to now, progress has been hampered by the cost of the materials used, including titanium and manganese. However, a new material, SS-H2, can achieve better corrosion resistance at a lower cost. Developed at the University of Hong Kong, it uses a “sequential dual-passivation” process incorporating both chromium- and manganese-based layers. It can be used in direct seawater electrolysis and can also be applied in ammonia synthesis, oil refining, steelmaking and methanol production.

Several stainless tube and pipe producers are working with the hydrogen industry to develop products for hydrogen storage and transport. Vallourec’s “Delphy” storage facility was unveiled in France in 2023, and in 2024 the company entered into partnership with Nextchem. Tubacex is involved with a project called DESSERT (“Advanced thread connected production string for hydrogen storage in underground formations”), which is working on the development of a new stainless-steel pipe for injecting and withdrawing hydrogen from underground reservoirs. In December Centravis agreed to supply stainless steel pipes to South Korea for a hydrogen production plant. The Ukrainian company previously supplied seamless pipes to a German company specialising in hydraulic connections with a high degree of leakage protection in projects using hydrogen and compressed natural gas.

In the field of solid oxide fuel cells, JFE Steel is producing a new ferritic grade for interconnectors, which is expected to reduce the cost of generating energy via SOFCs.

The Nuclear industry is benefitting from the drive to net zero emissions. About 65 reactors are under construction, and 90 more are planned; China is in the lead, followed by India, Russia, Egypt and several other countries (3). Although larger reactors will predominate, small modular reactors (SMRs) are being developed in China, Russia and the USA are expected to play a role. Among the tube makers who will benefit are Alleima, which supplies steam generator tubes for the SMR); Superior Tube, another supplier to SMRs; DMV, a supplier of stainless-steel and nickel-alloy seamless tubes and pipes; UK manufacturer Fine Tubes; Tubacex, which has been a supplier to EDF as it maintains its reactors in France; and French supplier Framatome.

Semiconductors are a growing and highly strategic industry, further buoyed up by the attention that AI has been receiving. With most of the production capacity being found in China and Taiwan, countries and regions across the world are providing incentives to boost domestic production.
The market for semiconductor tubing is expected to grow at a CAGR of 7.05% between 2024 and 2032. The USA is expected to be the fastest-growing market (4). The demand for Ultra High Purity (UHP) tubing is growing because of technological advances. UHP provides the means for safe transport of gases and chemicals such as nitrogen, hydrogen, helium and argon used in fabrication. The need to avoid contamination makes grade 316L the material of choice for UHPs. However, China Minmetals has developed a UHP made of graphite. Aerospace is also an area experiencing growth, now that the Covid-19 seems safely in the rear window. The demand for civil aircraft and space vessels is increasing. Defence spending is also on the rise in several countries.

One beneficiary is likely to be Tubacex, whose subsidiary Schoeller-Bleckmann Edelstahlrohr (SBER) recently achieved AS/EN9100 certification from the Aerospace Quality Group. Another company that is heavily involved in space vessels is Butting in Germany. Its Cryotech division received an order for Isar Aerospace for 1,100 metres of vacuum-insulated transfer pipe systems. These were prefabricated into a total of 171 spools with a permanent high vacuum. Material 304/304L was selected for the process pipe and 316/316L for the vacuum envelope.

Conclusion

Although the extent and effect of current uncertain market conditions are yet to be experienced, the investment strategies of numerous tube and pipe manufacturers seems to bode well for the future.

References

1. https://www.businessresearchinsights.com/market-reports/stainless-steel-pipes-and-tube-market-106732.
2. “Global Hydrogen Market Valuation is Skyrocketing to Reach US$ 1,657.24 Billion By 2050”, globenewswire.com, 27 January 2025.
3. https://world-nuclear.org/information-library/current-and-future-generation/plans-for-new-reactors-worldwide.
4. https://www.pwc.com/gx/en/industries/technology/state-of-the-semicon-industry.html.