Sumitomo Metals to Expand High End Seamless Pipe Sales

Sumitomo Metal Industries plans to increase the sales of high grade seamless pipe products including 13% chrome seamless, sour resistance oil well pipe and high alloy oil well pipe by 4.4% to 143,000 tonnes for fiscal 2011 ending March 2012 from fiscal 2010. The volume is same level as recent peak in fiscal 2006. The firm tries to improve the profitability by following increasing demand for high grade products under strong demand for energy especially in emerging countries.

The firm increases the seamless pipe sales by 4.2% to around 1 million tonnes in fiscal 2011 from fiscal 2010, which reaches first 1 million tonnes in 3 years. The firm plans to increase the high end products sales by 5,000 tonnes to 65,000 tonnes for 13% chrome seamless pipe and by 8,000 tonnes to 67,000 tonnes for sour resistance oil well pipe while the high alloy oil well pipe sales decreases by 7,000 tonnes to 10,000 tonnes.

The demand for 13% chrome seamless pipe is firm for areas other than USA and increases for small sized products for shale gas field in USA while the firm expects oil drilling activity recovers in Gulf of Mexico. The firm expects the sales of high alloy oil well pipe decreases due to slower export under political issues in Asia and Middle East while the sales of sour resistance oil well pipe is strong especially in Middle and Near East.

The firm’s seamless pipe sales hit peak at 1.16 million tonnes in fiscal 2006. The sales of super high end products also hit peak at 143,000 tonnes in the year and the high end products weight was 12.3% of total seam less pipe sales. The firm expects the high end products represent around 14% of around 1 million tonnes of total seamless pipe sales in fiscal 2011. The high end products rate is higher than the peak.

The firm is world No.1 oil well pipe maker in the variation especially in high end products including 13% chrome seamless pipe and high nickel alloy steel pipe. The firm expects the demand of high end products increases when shale gas development increases and oil and gas development condition gets severer in depth and corrosion.