Ukraine’s Interpipe braced for fall in production and sales

Friday, 27 March 2020 16:32:39 (GMT+3)   |   Istanbul

Ukrainian steel pipe and railway wheel producer Interpipe has said it expects the crude oil price crash and a consequent decrease in demand for oil country tubular goods (OCTG) worldwide will affect the company’s results in the nearest future.

The company stated that it is braced for a production and sales reduction of up to 30-50 percent in the third and fourth quarters as one of the possible scenarios. Among the main reasons for such a negative outlook, the company considers low crude oil prices, which in March slumped to their lowest in 17 years, falling to $24-27 a barrel. “It is a crushing blow for the USA with drillers to cut oil rigs or even to stop production. As a result, the demand for OCTG has dropped significantly.” stated Interpipe CEO Fadi Hraybe, going on to say that an additional pressure on the company’s positions in the US is 32 percent duty, which makes its goods uncompetitive. The demand in the MENA region has also been impacted already, with some consumers are delaying their tenders, while others are not confirming orders for the second half of the current year, he added. In addition, the production shutdowns and suspension of various construction projects in Europe amid the coronavirus outbreak will also influence the results of Interpipe.

The significant decrease in demand for pipes in the Ukrainian domestic market is also a negative influence for the company. The state company “Ukrgasvydobuvannya” has completely curtailed its 20:20 gas production expansion program, SteelOrbis understands. 

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