DEMAND FOR NUCLEAR STEAM GENERATOR TUBE MANUFACTURING SURGES
The need to meet increasing power demand and to reduce carbon dioxide emissions has triggered a worldwide increase in nuclear plant development, increasing the demand for steam generator tubes. Three companies have announced expansion projects to meet that demand.
Posted: May 5, 2010
The worldwide surge in the development of nuclear power plants has been largely triggered by the need to meet increasing power demand and to reduce carbon dioxide emissions. In this environment, the demand for steam generator (SG) tubes used in nuclear power plants is growing at an exponential rate.
However, there are only three companies operating in this sector: steel, engineering and electronics business Sumitomo Metal Industries, Limited (Osaka, Japan); engineering company Sandvik AB (Sandviken, Sweden); and seamless stainless steel tube manufacturer Vallourec S.A. (Boulogne-Billancourt, France). All three have announced capacity expansion projects at various times over the last year in answer to the increasing demand-supply gap.
Sumitomo Metal recently announced that it would expand the production capacity of its Amagasaki Steel Tube Works plant to almost three times its 2008 production level. The plant, located in the Hyogo Prefecture, produces steel SG tubes for pressurized water reactors for the nuclear power sector. The company plans to invest about $150 million to implement the expansion plan. The chief areas that will benefit from the capacity expansion are the cold working facility, an inspection facility, and a finishing facility. The expansion project is expected to be completed and brought online in April 2013.
Sumitomo Metals says its SG tubes production schedule is tied up until 2012, but it expects to receive continued orders from China, South Korea, the U.S. and other nations in and after 2013. Most of the orders received by the company for SG tubes have been for third-generation nuclear power plants, two of which are for AP1000 units owned by Westinghouse Electric Company LLC (Monroeville, PA) and are being set up at the Vogtle nuclear plant in Georgia.
In March 2009, Vallourec announced an 80 million-euro capacity expansion plan that would be implemented at its SG tube production sites in France and U.S. Valinox Nucléaire SAS (Montbard, France), the wholly owned subsidiary of Vallourec, dedicated to the nuclear industry, plans to ramp up the production capacity of its Montbard plant from the 1,800 kilometers of tubes per year as of 2008, to 4,500 kilometers of tubes per year by 2011. The Montbard plant manufactures nickel alloy and stainless steel tubes for steam generators used in nuclear power plants.
Valtimet SAS (Boulogne-Billancourt, France), where Vallourec has a stake of 95 percent, produces welded titanium, stainless steel and copper alloy tubes required for the secondary circuits in nuclear power plants. The company's facility at Venarey-les-Laumes in France has a 20,000-kilometer-per-year tubing capacity and a welding unit with nine lines. High Performance Tube, Incorporated (HPT) (Martinsville, New Jersey), a division of Valimet, Incorporated (Morristown, Tennessee), which is a group company of Vallourec, produces integral low-fin tubing for heat exchangers at its facility in Brunswick, GA. The facility uses difficult-to-form materials such as titanium, duplex steel, stainless steel, and nickel alloys. Both the facilities have announced expansion plans that will double the existing production capacities.
Vallourec's several pending SG tubing orders include one for the under-construction Flamanville reactor, which is the first Evolutionary Pressurized Reactor (EPRTM) in France, and another for nickel alloy SG tubing for China's first EPR at Taishan. Between December 2008 and January 2009, Vallourec received 11 orders for almost 3,000 kilometers of SG tubes from China. The orders are to be completed from late 2010 until early 2012. In June 2008, the company received nine orders amounting to almost 880 kilometers of tubing from two China-based companies. The deliveries were to be completed between 2009 and 2010.
In 2009, Sandvik Materials Technology (Sandviken, Sweden), a group company of Sandvik, also announced plans to expand the production capacity of its flagship high-alloy SG tubes facility at Sandviken and effectively meet the growing demand from the nuclear power sector. The first phase of the capacity expansion was scheduled to be completed sometime in early 2010. Following the announcement, Sandvik Materials Technology signed a long-term supply agreement with global nuclear technology leader Areva S.A. (Paris, France), whereby Sandvik will supply SG tubes that Areva will use in nuclear power plants globally. Implementation of the almost $280 million contract is to begin in 2013.
More recently in February 2010, Sandvik Materials Technology signed a multi-year SG tubes supply agreement with China's Harbin Electric Cooperation (Qinhuangdao) Heavy Equipment Company Limited (Harbin, China). The tubes will be used in the nuclear power sector, and delivery is to begin in 2012 and last until 2014. With this $210 million order, Sandvik has received about $1.1 billion worth of SG tube orders since the beginning of 2009. The orders have given further impetus to the company's capacity expansion plans, and it has announced further addition to the production capacities of its units at Sweden and the Czech Republic.
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