Interpipe OCTG pipe sales surged 59% in 1H21

Railway product sales volume at Ukraine’s largest pipe
and railway wheel producer Interpipe (INTHOL) was 15.5 kt in June, a 2.9% m/m
increase, according to the company’s monthly operational report released on
July 19. Pipe sales jumped 23.3% m/m to 59.6 kt, while external billet sales
dropped 57.8% m/m to 3.4 kt. Total sales volume advanced 9.9% m/m to 78.5 kt in
June.

 

The m/m jump in pipe sales in June was led by a surge
in OCTG pipes (+49.3% m/m to 19.0 kt) and a further increase in line pipes
(+19.1% m/m to 35.5 kt). Robust demand in the US and CIS drove the OCTG pipe sales
in June, while line pipe sales rose due to growing demand in Europe, MENA and
Ukraine, Interpipe said.

 

During 1H21, Interpipe’s pipe sales added 9.1% yoy to
257.8 kt, driven mostly by a 59.1% yoy surge for OCTG pipes to 70.5 kt. Line
pipe sales inched up 3.5% yoy to 150.6 kt, while sales of mechanical pipes
added 16.7% yoy to 10.6 kt. However, welded pipe sales dropped 29.9% yoy to
26.2 kt in 1H21.

 

Railway product sales dropped 20.6% yoy to 83.0 kt in
1H21, driven by a 25.5% loss for wheels to 68.1 kt, partially offset by a 19.1%
increase for wheelsets to 12.3 kt.

 

Interpipe boosted its external billet sales 45.0% yoy
in 1H21 to 29.8 kt.

 

Ukraine’s share of Interpipe’s pipe sales in 1H21 dropped
to 17%, or 5pp less than in 2020. At the same time, the share of sales in the
Americas rose 4pp to 15%, MENA’s share added 2pp to 26%, and the share of CIS
countries was flat at 11%. Europe’s share in pipe sales dropped 1pp to 28%.

 

The share of Interpipe’s railway product sales in
Ukraine in 1H21 dropped 5pp from 2020 to 9%, while the share of sales to Europe
retreated 3pp to 32%. At the same time, the share of sales to CIS countries
rose 2pp to 45%, and the share of sales in the Americas added 3pp to 6%.

 

Regarding production volumes, which might be
indicative of sales volumes in the coming months, Interpipe’s pipe production
added 11.3% m/m to 57.1 kt in June, while railway product output rose 8.9% m/m
to 14.2 kt. Steel production gained 5.9% m/m in June to 90.5 kt.

 

Dmytro Khoroshun: The rise in
OCTG pipe sales and Interpipe’s ability to maintain railway product sales above
15 kt per month are positive.

 

Interpipe’s railway product monthly sales have
rebounded almost fully to their average 16 kt level for 2020 despite Russia’s ban on railway product
imports from Ukraine, in force
since early February.