TMK Announces Operational Results for Q1 of 2020
TMK CEO Igor Korytko said “In 1Q 2020, we saw a quarter-on-quarter decline in our total pipe shipments at both the Russian and European divisions. The current challenging macro environment globally and significant oil price volatility have put pressure on pipe consumption in all our main markets. Although the Russian oil and gas pipe market traditionally shows certain resistance towards drops in oil prices, we do not expect the situation to improve in the second quarter. The market environment will most likely continue to negatively impact demand for our products, including seamless OCTG pipe.”
1Q 2020 vs. 1Q 2019
- Total pipe shipments declined by 5% year-on-year, to 727 thousand tonnes, due to a decrease in seamless pipe shipments at both the Russian and European divisions, reflecting an unfavourable economic environment and oil price volatility.
- Seamless pipe shipments were down 10% year-on-year, mainly due to lower shipments of seamless OCTG pipe at the Russian division (down 11% year-on-year) and weaker demand for industrial seamless pipe at the European division.
- Welded pipe shipments increased by 8% year-on-year, due to higher shipments of large diameter and industrial welded pipe at the Russian division.
1Q 2020 vs. 4Q 2019
- Total pipe shipments declined by 7% quarter-on-quarter, mainly due to lower shipments of seamless pipe, reflecting an unfavourable economic environment and oil price volatility.
- Seamless pipe shipments were down 9% quarter-on-quarter, due to weaker demand for seamless line pipe and seamless OCTG (seamless OCTG shipments were down 3% quarter-on-quarter) at the Russian division and lower shipments of industrial seamless pipe at the European division.
- Welded pipe shipments were virtually flat, supported by higher shipments of large diameter pipe, which compensated for a lower demand for welded industrial pipe at the Russian division.
2Q 2020 Outlook
In both Russia and Europe, we expect the overall demand for the Group’s products to remain under pressure in the second quarter of 2020, due to the continued unfavourable macroeconomic environment and oil price volatility.