Interpipe OCTG pipe sales surged 2.3x in 2021

Railway product sales volume at Ukraine’s largest pipe
and railway wheel producer Interpipe (INTHOL) was 16.4 kt in December, a 14.3%
m/m increase, according to the company’s monthly operational report released on
Jan. 24. Pipe sales jumped 22.9% m/m to 78.9 kt, while external billet sales
skyrocketed 5.1x m/m to 7.3 kt.

 

The m/m increase in pipe sales in December was driven
by a 69.5% jump for OCTG pipes to 35.3 kt. The OCTG pipe sales increase was
driven by deliveries to UGV, Ukraine’s largest state-controlled natural gas
producer, according to the report. Sales slid for line pipes 1.7% m/m to 34.4
kt, added 12.1% m/m for welded pipes to 6.8 kt, and inched up 5.4% m/m for
mechanical pipes to 2.4 kt in December.

 

The m/m rise in railway product sales in December was
driven by robust demand in the CIS, as the share of sales to that region rose
to 23% from 17% in November. The share of railway product sales in Ukraine
remained strong in December at 30%, similar to 32% in November and 27% in
October, and much higher than 11% in 9M21.

 

During 2021, Interpipe’s pipe sales added 28.1% yoy to
602.2 kt, driven by a 129.8% yoy surge for OCTG pipes to 191.3 kt. Line pipe
sales added 13.4% yoy to 326.9 kt, while sales of mechanical pipes advanced
34.7% yoy to 24.7 kt. However, welded pipe sales dropped 26.1% yoy to 59.3 kt
in 2021.

 

Railway product sales dropped 9.6% yoy to 174.0 kt in
2021, driven by a 13.9% loss for wheels to 143.3 kt, partially offset by a
25.5% increase for wheelsets to 24.5 kt.

 

Interpipe boosted its external billet sales 62.9% yoy
in 2021 to 57.0 kt.

 

Ukraine’s share of Interpipe’s pipe sales in 2021
dropped to 19%, or 3pp less than in 2020. At the same time, the share of sales
in the Americas rose 10pp to 21% and the share of CIS countries was unchanged
at 11%. Europe’s share in pipe sales dropped 5pp to 24% while MENA’s share slid
2pp to 22%

 

The share of Interpipe’s railway product sales in
Ukraine in 2021 added 2pp from 2020 to 16%, while the share of sales to Europe
retreated 2pp to 33%. The share of sales to CIS countries dropped 7pp to 36%.
The share of sales in the Americas added 3pp to 6%, and sales in other
countries jumped 5pp to 6%.

 

Regarding production volumes, Interpipe’s pipe
production jumped 20.5% m/m to 62.9 kt in December, and particularly its
production of OCTG pipes jumped 78.2% m/m to 23.2 kt. Its railway product
output added 8.1% m/m to 15.9 kt in December, while steel production rose 6.2%
m/m to 93.3 kt.

 

Dmytro Khoroshun: OCTG pipe
sales volume in December, 35.3 kt, was exceptionally high. The previous high
for OCTG pipe sales in the two years during which Interpipe has reported its
monthly volumes was 23.1 kt in September 2021. It is likely that OCTG sales
volume will drop m/m in January.

 

Regarding railway product volumes, strong domestic
sales in December more than compensated for weaknesses in exports.