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THE MARKET faced with a changing tendency

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The market for TUBACEX products and services has been suffering from a significant fall in recent years, leading to a permanent fall in volumes and a constant increase in price pressure, which has negatively affected the Group's results.

In spite of this unprecedented crisis in the sector, Tubacex has managed to lay the foundations of an advanced organization aimed at innovative solutions, obtaining historic contracts in premium products and earning the trust of end-users and engineering firms as the main sales channel. This positioning has enabled it to partially offset the poor market situation, preparing the organization for a change in trend that is expected to arrive in 2018.
In recent months, the first evidence of recovery has been observed with an increase in the price of oil and raw materials, an increase in imports from the USA or greater investment in the main sectors of the Group's activity, among others, which means that a significant improvement in the forthcoming months can be foreseen.
More specifically, TUBACEX reached an order backlog of €700 million in high value-added products in 2017 to be supplied over the next three years, which represents an unprecedented record for our company.
It is a backlog in which the Middle East region stands out from a geographical point of view, with special focus on an order for the supply of tubes for the extraction and production of gas for NIOC; Europe, mainly in the United Kingdom, Norway and Russia, with an important OCTG order for the leading Russian oil company (Lukoil) and tubular products for a refinery furnace made out of Premium steel with a high resistance to temperature; and Asia, with special emphasis on the Caspian Sea, where the TUBACEX Group obtained its largest order for umbilicals for Shah Deniz, one of the largest gas sites worldwide, among others.

Evidence of market recovery can be seen

Over the forthcoming months, high visibility is expected in the OCTG market with the participation of TUBACEX in new markets and large-scale projects. As for umbilical tubes, a gradual recovery is anticipated in line with the performance of this product segment in the final months of last year. There are reasons for medium-term optimism in the PowerGen sector thanks to TUBACEX's development of a new generation of “Advanced Ultra Super Critical” boilers, capable of withstanding up to 700 ºC at coal plants. It is expected that this new type of boilers will be welcomed in India. Finally, instrumentation tubes for the aeronautical sector are expected to be well received. 

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On the other hand, from the geographical point of view, Asia is considered to be a priority market for TUBACEX with an expected high rate of growth in terms of demand over the forthcoming years. Therefore, the Group is committed to strengthening its presence in this region through the incorporation of TUBACEX Awaji Thailand and the opening of new warehouses in United Arab Emirates, Iran and India.

Asia becomes a priority market

In short, it is expected that 2018 will be the year of a change in tendency, in which Tubacex will be able to demonstrate its ability to face the market challenges in terms of sustainability and competitiveness, trusting in innovation as a transforming lever and in professional teams as a driving force.