TMK plans to increase shipments in 2017

In 2016, TMK shipped a total of 3,440k tonnes of tubular products, down 11.2% y-o-y. The decline was mainly due to lower welded pipe sales. Seamless pipe shipments remained almost flat y-o-y at 2,399k tonnes.

Welded pipe shipments were 1,042k tonnes, down 28.7% y-o-y, 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 5.3% to 1,401k tonnes, mostly due to lower demand for welded OCTG in the American market.

Shipments of premium threaded connections were down 19.6% y-o-y to 550k 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 Y-o-Y with possible moderate growth of OCTG. Meanwhile, we expect a decline in LDP consumption due to the completion, or rescheduling of a number of major pipeline construction projects. Welded industrial pipe demand will be flat Y-o-Y.

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 y-o-y, primarily thanks to the recovery of the North American market and stable sales volumes in Russia.

Metal Supply and Sale Magazine