The production cost structure of precision seamless pipes is considerably more complex than that of ordinary seamless pipes, mainly because additional finishing and quality control processes are required. United Steel Industry Co., Ltd. has summarized the key components influencing the production cost of precision seamless pipes as follows:
1. Raw Material Costs
Billet Cost:
The billet represents the most critical cost component. Precision seamless steel pipes are generally reprocessed from hot-rolled seamless pipes, so the billet’s quality and price directly affect the final product cost. Billet prices vary depending on steel market trends, steel grades (such as carbon steel, alloy steel, or stainless steel), and billet specifications.
Alloy Elements:
When producing alloy precision seamless pipes, additional alloying elements—such as chromium, nickel, and molybdenum—must be added. Price fluctuations of these elements significantly impact the overall material cost.
2. Production and Processing Costs
Hot Rolling / Cold Rolling (Tube Billet Manufacturing):
If billets are produced in-house, costs include energy consumption, equipment depreciation, and labor expenses for heating, rolling, and cutting operations.
Cold Drawing / Cold Rolling / Finish Rolling (Finishing Processes):
These are unique and essential steps in producing precision seamless pipes, each contributing to higher costs:
Cold Drawing: Involves drawing force, die wear, lubricant use, and multiple drawing passes.
Cold Rolling: Includes rolling force, roll wear, lubricant and coolant consumption, intermediate annealing, and process repetitions.
Finish Rolling: Requires precision rolling mills, high-accuracy molds, and stringent process control, resulting in higher costs than cold drawing or rolling.
Heat Treatment:
Heat treatment (e.g., annealing, normalizing) is necessary to eliminate internal stress from cold working. It adds costs for furnace energy use, holding time, and cooling methods.
Surface Treatment:
Depending on customer requirements, surface treatments such as pickling, phosphating, polishing, or honing may be applied, further increasing costs.
Inspection and Testing:
Precision seamless pipes undergo rigorous inspection for dimensions, mechanical properties, and surface quality. Both non-destructive tests (e.g., ultrasonic, eddy current) and destructive tests (e.g., tensile, hardness) contribute to overall costs.
Mold and Tool Costs:
The production process involves multiple molds and tools, whose manufacturing, maintenance, and replacement represent a notable cost factor.
Lubrication and Cooling:
Large quantities of lubricants and coolants are consumed during cold working to minimize friction and control temperature, adding to the operational expenses.
3. Equipment Depreciation and Maintenance
Precision seamless pipe manufacturing relies on high-precision cold drawing machines, rolling mills, finishing mills, and heat treatment furnaces. These machines represent substantial capital investment, with significant depreciation and maintenance costs over time.
4. Labor Costs
Skilled operators and quality inspectors are essential for precision pipe production. As a result, labor expenses are typically higher than in standard seamless pipe manufacturing.
5. Energy Costs
The entire process consumes large amounts of electricity, natural gas, and water, making energy another major cost component.
6. Environmental Costs
With increasingly strict environmental regulations, manufacturers must invest in emission control, wastewater treatment, and solid waste management systems, further adding to overall expenses.
7. Management and Quality Control Costs
Operational management, administration, and financial oversight costs are apportioned to production. Moreover, maintaining a comprehensive quality management system and enforcing strict quality control standards contribute additional costs.
Summary
The production cost structure of precision seamless steel pipes is multifaceted, with raw materials and finishing processes being the dominant contributors. Compared with ordinary seamless pipes, precision seamless pipes entail significantly higher costs due to more complex finishing steps, advanced equipment, and rigorous quality assurance requirements.
United Steel Industry As the most important steel pipe manufacturer and exporter in China, in the past 20 years, we have completed more than 100 projects, with partners in more than 100 countries, and established relationships with oil and gas and EPC companies in many countries business relationship.
For more information about the product price, catalog and rolling mill inspection certificate,
please consult:Email:Sales@usisteels.com
