Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

TMK Group’s pipe sales dropped by 29pc to 2.076mn mt in 9M (first nine-months of 2020) from 2.932mn mt in the prior-year period mainly due to the disposal of its American business and lower sales in the Russian and European business segment. Sales of Seamless fell by 23pc in 9M to 1.544mn mt from a year ago, while Welded sales dropped by 42pc to 532,000mt. 



For the fourth quarter, the Group expects stable OCTG pipe demand from Russian oil and gas companies until the end of December. Demand for industrial pipe may be impacted by tough market conditions in Europe due to the second wave of COVID-19 lockdowns. For the full year 2020, TMK expects EBITDA to be largely in line with the prior year.


Russian markets continue to be impacted by sanctions on some companies and individuals. The restricted access to international capital markets is also hurting business sentiments in the country. With the COVID-19 pandemic significantly impacting global economic activity, the group believes the market situation could remain challenging in the near future. TMK is adapting to the current conditions by focusing on the development and promotion of high-tech products and solutions, according to the company release. 


Q3 2020 

In Q3, the Russian pipe market grew by 14pc from Q2 on higher demand for industrial pipes and increased delivery of large diameter pipe amid a decline OCTG sales. A slowdown in active drilling and OPEC’s oil production cuts reduced purchases by the oil and gas companies. 


In Europe, pipe market conditions remained challenging in Q3 amid low demand from major consuming industries due to a build-up of inventories at end-users and fall in prices.



In 9M, TMK’s revenues fell by 32pc to RUB163.1bn ($2.22bn) on disposal of the American business unit and lower sales volumes. Adjusted EBITDA for the nine-months rose by 6pc to RUB34.8bn aided by a focus on high-tech products and foreign exchange gain. In 9M Adjusted EBITDA margins for the Russian and European divisions was 21pc up from 16pc in the prior year period.




* Acquisition of 100pc ownership of Parus, LLC, is a casting and rolling complex, located in Yartsevo, Smolensk Region in October. The company has an annual production capacity of 300,000mt of rolled steel. 


* Acquisition of controlling stake in Truby 2000, LLC, manufacturers of pipelines for the nuclear industry. The acquisition provides the TMK opportunity to partner with the state-owned Rosatom and expand into the nuclear equipment sector. By December 2023, TMK plans to supply around 200,000meters of pipes for a pilot neutron reactor for an experimental power unit constructed by Rosatom.

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