Interpipe pipe output rises 21% yoy in 9M18

Pipe production at Ukraine’s largest producer Interpipe
(INPIP) was 2.09 kt per day (or 62.6 kt per month) in September, an 8.2% m/m
plunge in average daily terms, according to Concorde Capital’s analysis of an
Oct. 25 news report by Interfax-Ukraine.

Interpipe NTRP pipe production dropped 9.9% m/m to
0.75 kt per day in September. Interpipe NMPP output inched up 3.3% m/m to 0.40
kt per day. Interpipe Niko Tube output plunged 11.1% m/m to 0.94 kt per day.

In 9M18, Interpipe’s pipe production was 581.9 kt, or
20.8% more yoy.

In a separate news report, Interfax-Ukraine said that
Interpipe Steel’s output of crude steel was 2.57 kt per day in September, a
3.3% m/m increase. The 9M18 steel output at Interpipe Steel was 738 kt, a 13.7%
yoy gain.

Dmytro Khoroshun: Interpipe’s
daily pipe production volume dropped in September following the 15.4% m/m
plunge in steel production in August, as we expected. The rebound
in daily steel production in September, 3.3% m/m, was small, and therefore the
daily pipe production in 4Q18 might remain in the 1.9-2.1 kt range, below the
2.2-2.3 kt per day range Interpipe demonstrated in March-August. Therefore, we
continue to expect the company will produce 0.75 mmt of pipes in 2018, up 14%
yoy.

Nevertheless, the yoy dynamic remains strong: in 2017,
Interpipe produced 1.80 kt of pipes per day on average. Therefore, we continue
to think the time is right for Interpipe and its creditors to move forward with
the debt restructuring the company has recently proposed.