Pipe shipments at TMK’s Russia operations will remain under pressure through Q3 2020 because of ongoing market challenges and planned maintenance and improvement projects in the region’s main production site.
The global tubular products producer could also witness a slow upturn in its European industrial pipes utilization business during the quarter, the company said while reporting its Q2 2020 and H1 2020 earnings on Wednesday.
During the quarter TMK, achieved improvement in seamless pipe shipments compared with Q1 2020 but recorded declines in operational results for the first six months of the year compared to H2 2019.
Igor Korytko, chief executive officer, TMK, said that the largescale pandemic brought on the ongoing demand declines for its products. However, TMK received some gains in its Russian seamless OCTG pipe shipments along with strong premium connection pipe demand during the period being reported.
The company also benefited from more seamless industrial pipe consumption in Europe compared to the prior quarter. However, Korytko added, TMK does not project total pipe consumption to gain considerably in the near-term.
TMK’s total pipe shipments dropped 13pc to 1.39mn mt in H1 2020 compared to 1.61mn mt of total pipe shipped in H1 2019. The company attributed the fall to slow seamless pipe shipments in its Russian and European regions, and fewer welded pipe shipments in the Russian division. The decline also indicates global challenges due to COVID-19 and the resulting unpredictability of oil prices.
Seamless pipe shipments declined by 8pc to 1.04mn mt in H1 2020 from 1.13mn mt in the first six months of 2019 while its welded pipe shipments dropped by 26pc to 355,000mt in H1 2020 compared to 481,000mt in H1 2019. The manufacturer recorded an 8pc decline in total pipe shipments to 666,000mt in Q2 2020 compared to 727,000mt shipped in Q1 2020.
Seamless pipe shipments rose by 6pc to 533,000mt Q2 2020 compared to 505,000mt in the previous quarter due to increased seamless OCTG pipe shipments in the Russian sector and improved seamless industrial pipe shipments at the Russian and European operations.
TMK recorded a 40pc drop in welded pipe shipments to 133,000mt in Q2 2020 compared to 222,000mt shipped in Q1 2020 due to fewer shipments within all welded pipe sections from the Russian operation. The large decline was also attributed to a 42pc drop in large diameter pipe consumption in Q2 2020 compared to the previous quarter.