The Russian pipe producer TMK Group (TMK) has announced that in Q1 2010 it saw a 60 percent increase year on year in its pipe shipments to 933,000 mt, which reflected the continuation of the positive trends seen in its key segments in late 2009, as oil and gas companies increased capital expenditure and continued with the implementation of investment projects.
Product |
Q1 2010 (mt) |
Q4 2009 (mt) |
Change q-o-q (%) |
Q1 2009 (mt) |
Change y-o-y (%) |
Seamless pipes |
537,000 |
495,000 |
8.4 |
402,000 |
33 |
Welded pipes |
396,000 |
378,000 |
4.8 |
179,000 |
121.1 |
Total pipes |
933,000 |
874,000 |
6.8 |
581,000 |
60 |
Including OCTG |
363,000 |
322,000 |
12.7 |
278,000 |
30.5 |
During the period in question, the intensive development of US shale gas continued to fuel demand for high grade products suitable for these unconventional developments. The US drilling environment showed robust growth in Q1 2010 with a 23 percent increase in the US rig count. The demand for TMK IPSCO pipe products allowed capacity utilization levels to surpass 70 percent.
TMK's premium connections business increased by more than two times in Q1 2010 compared to the same period last year mainly due to the increasing demand in Russia's Eastern Siberia region and in the Caspian. During the first three months of the year, TMK shipped more than 112,000 mt of premium connections joints.
As previously stated, by the end of 2009 TMK's ULTRA premium connections had reached an estimated 30 percent share of the US onshore shale gas premium connections market. This increase in demand prompted TMK to further invest in ULTRA threading capacity, such as the announced ULTRA facility in Brookfield, Ohio. In Russia, TMK increased its premium connections market share to around 70 percent.
The implementation of several large scale pipeline projects by Russian oil and gas companies, such as Transneft and Gazprom, coupled with the ramping-up of Volzhsky's longitudinal welded large-diameter pipe mill, allowed TMK to increase its Q1 large diameter pipe shipments by eight times year on year to 150,000 mt.
In addition, the rebound of demand from the mechanical engineering and power generation sectors, including nuclear power plants, also allowed TMK to increase its shipments of high performance tubulars. Specifically, in the first quarter of the current year, TMK's cold drawn and stainless steel shipments saw an increase of 18 and 40 percent year on year.
"The company plans to continue leveraging its competitive advantages to sustain growth while improving product mix by enhancing the share of high performance and premium grade products," reads TMK's statement.