Interpipe pipe sales volume plunges 41% m/m in January

Pipe sales volume at Ukraine’s largest producer
Interpipe (INTHOL) was 30.2 kt in January, a 41.0% m/m drop, according to the
company’s January operational report released on Feb. 18. Railway product sales
rose 9.7% m/m to 21.3 kt, while external billet sales jumped 5x m/m to 3.6 kt.
Total sales volume dropped 6.1% m/m to 823.0 kt.

The m/m plunge in pipe sales volume in January was
driven by OCTG pipes (-55% m/m to 8.5 kt), line pipes (-33% to 15.9 kt) and
welded pipes (-35% to 4.5 kt).

The m/m increase in railway product sales was driven
mostly by sales of wheelsets, which jumped 2.3x m/m to 2.0 kt, and wheels (a
5.9% gain to 18.7 kt). CIS countries comprised 48% of railway product sales in
January, followed by Europe (30%) and Ukraine (12%).

Regarding production volumes, which might be
indicative of sales volumes in future months, Interpipe’s production of pipes
was flat m/m at 32.1 kt in January, while railway product production dropped
10.7% m/m to 17.5 kt.

Dmytro Khoroshun: Interpipe’s
pipe sales stagnated in January, as the 30.2 kt sold is about 40% below the
average 2019 monthly level of 50 kt. The low January pipe production volume
does not promise a sales volume rebound in February.

Its railway product segment, on the other hand, is
selling close to Interpipe’s capacity. The drop in Ukraine’s share of railway
product sales to 12% in January from 22% in 2019 is not necessarily negative.
This is because Interpipe prices in Ukraine are likely lower than for the
abnormally lucrative, for the moment, CIS market (primarily Russia), the share
of which increased to 48% in January from 45% in 2019.