TMK’s total pipe shipments decreased by 5pc to 727,000mt in Q1 2020 compared to 768,000mt in Q1 2019, largely due to declining seamless pipe shipments at its Russian and European divisions.
The group of companies’ production assets are located across Russia, Romania, and Kazakhstan, in addition to the US.
Oil price volatility and challenging economic conditions in major markets put more pressure on seamless pipe than welded pipe. Igor Korytco, the company’s chief executive officer, said it doesn’t expect the oil and gas pipe market to improve in Q2, with seamless OCTG pipe demand negatively affected.
Seamless pipe shipments declined by 10pc to 505,000mt in Q1 2020 compared to 562,000mt during the same quarter last year because of an 11pc drop in OCTG pipe shipments at its Russian division, as well as weaker demand for industrial seamless pipes at its European division.
Welded pipe shipments increased by 8pc to 222,000mt in Q1 2020 compared to 206,000mt in Q1 2019, due to higher large diameter and industrial welded pipe shipments at its Russian division.
Compared to Q4 2019 quarter, total pipe shipments declined by 7pc from 778,000mt because of lower shipments of seamless—a consequence of oil price volatility. Seamless pipe shipments decreased by 9pc from 553,000mt in Q4 2019 as demand for seamless line pipes and seamless OCTG at the Russian division fell. Moreover, there were lower shipments of industrial seamless pipe at the European division.
Welded pipe shipments totaled 225,000mt in Q4 2019, and declined by only1pc in Q1 2020, supported by higher shipments of large diameter pipe, which compensated for a lower welded industrial pipe demand at the Russian division.
TMK’s Russian division has over 38,000 employees across seven plants, and its annual pipe making annual capacity is 4.835mn mt. Its European division employs 2,000 across two production plants with a pipe making capacity of 220,000mt. At the quarterly rate, the Russian and European divisions are estimated to run at 60pc capacity in 2020. TMK America (IPSCO Tubular acquired from Tenaris) has approximately 2,000 employees over 12 plants with a pipe making capacity of 1.390mn mt.
TMK is a tubular product producer for the oil and gas industry. In fiscal 2019, the group of companies, including TMK America, shipped 3.800mn mt of pipe with seamless shipments of 2.625mn mt, or 69pc of the total, and 1.176mn mt of welded pipe comprising the remaining 31pc.