TMK’s healthy shipment volumes to sustain profits in H1

Russia's largest oil and gas pipe producer TMK has announced that according to its preliminary data in Q1 2011 it shipped a total of 1.076 million mt of steel pipes, of which 389,000 mt were OCTG and 208,000 mt were line pipe.
 
TMK's OCTG pipe sale volumes in Q1 2011 rose by six and seven percent compared to Q4 2010 and Q1 2010, respectively. Large diameter (LD) steel pipe shipments in Q1 2011 remained strong at 214,000 mt, which is 43 percent higher compared to Q1 2010. TMK's North American division TMK IPSCO saw its shipments increase by 11 percent compared to Q4 2010 to 236,000 mt. 
 
To address significant raw material price increases observed since the beginning of 2011, TMK increased prices for pipe products in Q1 2011 by 10-15 percent. According to TMK, the recent spike in steel prices will adversely affect margins in Q1 2011.
 
"Despite a percentage margin squeeze in the first half of 2011, healthy shipment volumes should allow the company to sustain profits compared to the second half of 2010," TMK says in its statement.
 
TMK expects ore and steel prices to decline going into Q2 2011 which should support its margins for the remainder of the year.