Russia-based pipe and tube producer OAO TMK reported Thursday that shipments of tubular products by its American division increased 23.1 percent year-on-year in Q1 2012, and 3 percent higher than in Q4 2011. Welded pipe production continued to increase due to strong demand for line pipe used in the transportation of hydrocarbons to refineries and storage locations. Welded line pipe shipments grew by 127 percent in Q1 compared to the same period last year and by 16.3 percent over Q4 2011. TMK's American division increased seamless and welded OCTG shipments by 22.9 percent and 18.5 percent year-on-year respectively.
TMK noted that as of March 31, the Baker Hughes rig count was 1,979 rigs, representing an 11.4 percent year-on-year growth. The continued development of US shale plays has driven horizontal and directional drilling to over 70 percent of the rig count activity, which triggered increased shipments of TMK's premium connections.
Overall, TMK shipped 1.52 million mt of steel pipes in Q1, a decrease of 2.2 percent year-on-year. Reduction in total shipments resulted from lower sales volumes in the welded pipe business. This represents a 1.5 percent quarter-on-quarter increase. Seamless pipe shipments grew by 6.6 percent year-on-year and by 9.3 percent quarter-over-quarter to 632,000 mt. Welded pipe shipments fell by 13 percent to 421,000 mt driven by lower demand for Russian large diameter pipe as compared to the first quarter of 2011. Shipments of premium connections rose to 138,000 joints, representing a 27.8 percent increase over the same period of 2011.