Industry fund: New capacities of Zagorsk Pipe Plant excessive

MOSCOW, Oct 11 (PRIME) -- New seamless pipes capacities of 450,000–500,000 tonnes that Zagorsk Pipe Plant wants to build are excessive for the Russian market, the Fund for Development of Pipe Industry said in a statement on Friday.

The fund said that combined capacity of all Russian plants stands at 4.1 million tonnes, and it was loaded by only 70% as of the start of 2019. Vyksa Metal Works is already implementing an investment project that would expand capacity to 4.6 million tonnes until 2022, while demand for seamless pipes in the country grows by 2–4% per year and no rapid growth is expected in the foreseeable future.

“Moreover, the moderate demand growth trend may switch into moderate contraction as the pipes are being partially replaced by seamed analogues from the segment of oil country tubular goods,” the statement read, adding that the existing capacity for seamless pipes should be enough to cover domestic demand least until 2030.

“The fund’s opinion is that the seamless pipes project announced by Zagorsk Pipe Plant is excessive for the industry. It would lead to irrational spending of budget money if the government supports the project, it would not result in an increase of industrial production or in substitution of imports,” the fund tread.

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