Interpipe OCTG pipe sales surged 76% in 8M21

Railway product sales volume at Ukraine’s largest pipe
and railway wheel producer Interpipe (INTHOL) was 14.6 kt in August, a 10.3%
m/m increase, according to the company’s monthly operational report released on
Sept. 17. Pipe sales jumped 23.9% m/m to 55.7 kt, while external billet sales
dropped 54.6% m/m to 3.6 kt.

 

The m/m jump in pipe sales in August was due to
several factors. First, OCTG pipe sales added 29.5% m/m to 18.8 kt primarily
due to robust demand in the MENA region, the report said. Second, line pipe
sales (+13.8% m/m to 29.0 kt) were supported by growth across all regions,
particularly MENA, CIS and Ukraine. Third, welded pipe sales surged 87.1% m/m
to 5.5 kt due to a downturn in the prices of the key raw material, the
hot-rolled coils, which effectively resurrected the global demand for welded
pipes.

 

The m/m gain in railway product sales was fueled by
higher deliveries to India and Turkey, according to the report.

 

During 8M21, Interpipe’s pipe sales added 15.5% yoy to
358.0 kt, driven by a 76.5% yoy surge for OCTG pipes to 103.6 kt. Line pipe
sales added 10.7% yoy to 205.0 kt, while sales of mechanical pipes advanced
27.0% yoy to 14.9 kt. However, welded pipe sales plunged 36.4% yoy to 34.6 kt
in 8M21.

 

Railway product sales dropped 15.5% yoy to 111.0 kt in
8M21, driven by a 20.0% loss for wheels to 91.3 kt, partially offset by a 21.4%
increase for wheelsets to 16.2 kt.

 

Interpipe boosted its external billet sales 70.0% yoy
in 8M21 to 41.4 kt.

 

Ukraine’s share of Interpipe’s pipe sales in 8M21
dropped to 17%, or 5pp less than in 2020. At the same time, the share of sales
in the Americas rose 5pp to 16%, MENA’s share added 1pp to 25%, and the share
of CIS countries gained 1pp to 12%. Europe’s share in pipe sales dropped 3pp to
26%.

 

The share of Interpipe’s railway product sales in
Ukraine in 8M21 dropped 4pp from 2020 to 10%, while the share of sales to
Europe retreated 2pp to 33%. The share of sales to CIS countries was flat at
43%, and the share of sales in the Americas added 2pp to 5%.

 

Regarding production volumes, which might be
indicative of sales volumes in the coming months, Interpipe’s pipe production
rose 9.3% m/m to 60.0 kt in August, and particularly its production of welded
pipes tripled m/m to 5.7 kt. Its railway product output slid 2.1% m/m to 15.2
kt in August, while steel production jumped 22.9% m/m to 95.4 kt.

 

Dmytro Khoroshun: The m/m
rises in pipe sales in August, particularly for welded pipes, are positive.

 

Interpipe might maintain its sales to the Americas
region at around 15% of its
total sales, but the profitability of these sales will drop because of the
recent rise in anti-dumping duties for its exports into the US.