The Ukrainian Metal

Russia: TMK to increase shipments in 2017

In 2016 TMK shipped a total of 3,440 thousand tons of tubular products, down by 11.2% YoY. The decline was mainly due to lower welded pipe sales. Seamless pipe shipments remained almost flat YoY at 2,399 thousand tons.

Welded pipe shipments were 1,042 thousand tons, down by 28.7% YoY, mainly due to lower output across all types of welded pipe at the American division and lower consumption of large-diameter pipe (LDP) in Russia.

OCTG shipments were down by 5.3% to 1,401 thousand tons, mostly due to lower demand for welded OCTG on the American market.

Shipments of premium threaded connections were down by 19.6% YoY to 550 thousand joints due to new complex hydrocarbon exploration and production projects suspension in North America.

According to TMK, Russian oil and gas companies’ planned oil production cuts will not substantially affect OCTG and line pipe consumption in 2017 in Russia, which will remain flat YoY with possible moderate growth of OCTG. Meanwhile, a decline in LDP consumption is expected due to the completion, or rescheduling of a number of major pipeline construction projects. Welded industrial pipe demand will be flat YoY.

With the anticipated rebalancing of the global oil market, TMK expects American oil & gas companies to invest more in exploration and production; thus, increasing drill count will drive the recovery of oil and gas pipe consumption.

Demand for seamless industrial pipe in Europe is expected to grow slightly on the back of increased demand from machine building industries.

Overall, in 2017 the company expects an increase in shipments of its main target product segments YoY, primarily thanks to the recovery of the North American market and stable sales volumes in Russia. (Metalinfo/Ukrainian metal)

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