Russia-based TMK, one of the world's leading oil and gas steel pipe producers, has announced its operational results for the fourth quarter and the full year of 2016.
In 2016, TMK shipped 3.44 million mt of steel pipes to customers, representing an 11.2 percent decrease compared to the previous year. The decline was mainly due to lower welded pipe sales. Shipments in the fourth quarter increased by 7.4 percent quarter on quarter to 882,000 mt.
In the whole year, seamless pipe shipments fell by 0.6 percent year on year to 2.39 million mt. Shipments of seamless pipes in the fourth quarter increased by 3.1 percent quarter on quarter to 633,000 mt.
TMK's welded pipe shipments dropped by 28.7 percent year on year in 2016 to 1.04 million mt, mainly due to lower output across all types of welded pipe at the American division and lower consumption of large-diameter pipe (LDP) in Russia. The fourth quarter welded pipe shipments were up by 20 percent compared to the third quarter, totaling 249,000 mt.
In 2016, TMK's oil country tubular good (OCTG) shipment volumes decreased by 5.3 percent year on year to 1.40 million mt, mostly due to lower demand for welded OCTG in the American market, while in the fourth quarter shipment volumes registered a 2.2 percent increase compared to the third quarter, rising to 382,000 mt.
Shipments of premium connections declined to 550,000 joints in 2016, down 19.6 percent year on year, with shipment volumes increasing by 18 percent to 174,000 mt in the fourth quarter of the year, on quarter-on-quarter basis, as shipments of premium products grew in the American division on the back of the US pipe market recovery and in Russia thanks to increased horizontal drilling.
According to TMK, Russian oil and gas companies’ planned oil production cuts will not substantially affect OCTG and line pipe consumption in the current year in Russia, which will remain flat year on year with possible moderate growth of OCTG. Meanwhile, TMK expects a decline in large-diameter pipe (LDP) consumption due to the completion or rescheduling of a number of major pipeline construction projects. Welded industrial pipe demand will be flat compared to 2016.