In January-June of this year, the Ukrainian industrial company Interpipe increased supplies of Oil Country Tubular Goods (OCTG) to the United States due to a surge in activity in the oil and gas sector amid rising prices for hydrocarbons, First Deputy CEO of Interpipe Denys Morozov has said in an interview with Metal Expert publication.
According to him, this is a positive moment – American companies have resumed drilling, and now is the “right time” for Interpipe to increase supplies of threaded OCTG pipes, including premium and semi-premium products.
“We are actively engaged in its production and promotion. In the first half of 2021, Interpipe has already increased the supply of OCTG pipes to the United States. We expect that positive dynamics will continue in the second half of this year,” Morozov said.
At the same time, he pointed out a number of restrictions on the supply of pipes to the United States. Thus, the U.S. Department of Commerce intends to impose duties on seamless line pipes at a rate of 23.75%.
At the same time, he said that Interpipe continues supplies to the U.S. market, but in the future it will study their economic efficiency with the hope that new relations will be built with new U.S. President Joe Biden. Accordingly, Ukraine will be able to re-start negotiations on the abolition of section 232, which is a significant barrier to the growth of supplies.
The first deputy CEO added that last year the company took a number of steps to promote its products in the Middle East region, the goal is to get into the league of premium pipe suppliers.
“In the Middle East, we continue to implement our strategy aimed at expanding our presence, looking for new niches, customers and increasing supplies. This year we plan to complete prequalification from the Emirati giant ADNOC. In general, the Middle East is a region with traditionally stable oil production and stable pipe consumption. Therefore, it is only natural that we expect sales growth in both segments: both OCTG and line pipes,” Morozov said.
According to him, the main problem in the markets of the countries of Central Asia is great difficulties with financing projects, since local companies do not have enough money to implement all projects at once. Now, amid high oil prices, the financing situation has improved somewhat. Accordingly, pipe consumers in Uzbekistan, Turkmenistan and Azerbaijan resumed purchases. The positive dynamics is expected to continue in the second half of the year.
Concerning supplies to the EU, he said that at the moment it is impossible to increase sales to the EU countries due to quotas, despite the presence of deferred demand in this market. The company chooses the pipe quota allocated to Ukraine, but after its use the supplies stop. From time to time it is possible to use part of the other countries quota, but these are small amounts.
In Ukraine, Interpipe has completed several contracts for the supply of UPJ-M, UPJ-P and UPJ-F premium pipes for domestic private oil and gas companies. But the volume of drilling and consumption of OCTG pipes in the country increased insignificantly.
In 2021, the volume of supplies to the Ukrainian market did not decrease. Moreover, it is likely that even a slight increase will be recorded by the end of the year. But if we compare with the results of 2018-2019, then consumption has not yet returned to the pre-crisis level. For example, if in 2018 Ukrgazvydobuvannia purchased about 70,000 tonnes of threaded pipes, and half of them were of premium assortment, now the total consumption by this state-owned company is 20,000 tonnes.
“We hope that the current relatively high gas prices will stimulate oil and gas companies to increase the volume of drilling and consumption of our pipes. Perhaps, in the second half of the year we will see improvements, but so far these are only our forecasts,” Morozov said.
According to the expert, there is no significant growth in the machine-building segment either; consumption by machine-building companies is correlated with the growth / decline of the country’s GDP. Interpipe does not forecast any sharp surges until the end of the year, so the sales of machine-building pipes are likely to remain at last year’s level.
The market is expected to stabilize in the near future and the Novomoskovsk plant will resume normal operations. In turn, the company sold a record amount of steel billets to third customers this year.
The Ukrainian industrial company Interpipe is increasing the volume of deliveries of premium products and expanding the list of countries where they are used, according to the company’s Facebook page.
At the same time, it is noted that pipes with premium sleeveless UPJ-F connection are successfully operated in Uzbekistan.
“At the beginning of the year, we talked about the supply of pipes with a sleeveless joint of our own design UPJ-F to our permanent partner, Uzbekneftegaz. In the second quarter, such casing pipes of two diameters – 139.7 mm and 193.7 mm – were successfully run, showed high performance and received positive feedback from the client,” the report says.
The press release specifies that Ukrainian pipes with UPJ-F are used to produce gas in difficult geological conditions. The absence of a sleeve makes it easier to run pipes in wells with complex profiles or in horizontal sections. This connection expands the capabilities of customers in the field of well building, accelerates drilling and guarantees the highest level of gas tightness.
Interpipe is a Ukrainian industrial company, a manufacturer of seamless pipes and railway wheels. The company’s products are supplied to more than 80 countries around the world through a network of sales offices located in the key markets of the CIS, the Middle East, North America and Europe. In 2020, Interpipe sold 662,000 tonnes of finished products, including 192,000 tonnes of railway products. Railway products are sold under the KLW brand.
Interpipe employs 11,000 people. In 2020, the company transferred UAH 2.54 billion to the budgets of all levels.
Interpipe, a Ukrainian industrial company, in January-June of this year increased payment of taxes and fees to the budgets of all levels and extra-budgetary funds by 10.4% compared to the same period last year, to UAH 1.49 billion, the company’s Facebook page says.
At the same time, it is specified that the favorable situation on the external markets of pipe and railroad products allowed the enterprises of Interpipe to increase production volumes. The demand on the Ukrainian market continues to stagnate.
“Moreover, the main risk in the second half of the year is the uncontrolled export of scrap metal. Already in the summer the company is experiencing a serious shortage of raw materials, which may lead to a decline in production and, accordingly, a decrease in tax payments,” the press release said.
As reported, Interpipe in the first quarter of 2021 increased payment of taxes and fees by 4% compared to the fourth quarter of last year, to UAH 590 million.
In 2020, the company paid UAH 2.54 billion in taxes and fees, reducing payments by 22% due to a drop in demand because of the coronavirus. At the same time, in the first quarter of 2020, the company increased payment of taxes and fees by 3% compared to the same period in 2019, to UAH 803 million. In the first half of 2020, Interpipe reduced payment of taxes and fees by 10%, to UAH 1.35 billion due to the coronavirus pandemic and a decrease in demand for products. For the nine months of 2020, the company paid almost UAH 2 billion in taxes and fees.
In 2019, Interpipe increased tax payment by 50% compared to 2018, to UAH 3.25 billion.
The Ukrainian industrial company Interpipe intends to implement a number of projects in the next three years, taking into account the environmental component in the amount of $100 million, Denys Morozov, the First Deputy Director General of Interpipe, said at the first international forum “Decarbonization of the Steel Industry: a Challenge for Ukraine.”
“If we do not engage in decarbonization, then in the next 20-30 years the climate can be irreversibly changed,” Morozov stated.
According to him, in addition to an economic effect, all these investments have an obligatory environmental component. Among the projects, the top manager highlighted the construction of a wheelset assembly workshop for the EU and U.S. markets, the construction of a new thermal department at Interpipe Niko Tube, and the installation of a new hydraulic press at Interpipe Nyzhniodniprovsky Pipe Rolling Plant. Thanks to the implementation of these projects, both emissions of harmful substances and water consumption will be reduced.
The company will also continue to work on further reducing emissions of CO2 and other harmful substances, waste treatment, and increasing energy efficiency of production.
The expert stated that the issues of climate and decarbonization of the economy are now on the agenda of all the leading countries of the world. The European Union has adopted a special program called Green Deal, according to which the achievement of climate neutrality on the European continent is planned by 2050. The decarbonization of the metallurgical industry plays an important role in it.
According to his presentation, in all developed countries the share of electrometallurgy in total steel production is dominant or significant. Thus, the leaders are the countries of the Middle East (94%), Mexico (83%), the United States (71%) and Turkey (69%). India (56%), Canada (46%) and the European Union (42%) are not far behind.
“In this regard, Ukraine looks like an outspoken outsider – the share of electrometallurgy does not exceed 5%,” Morozov noted, urging to increase it.
The Ukrainian industrial company Interpipe is continuously evolving high-tech exports as well as collaboration with Indian Railways. The cooperation between two companies has already been lasting for more than 25 years.
The company said in a press release that during this time Interpipe supplied both locomotive and passenger wheels to India.
“Now, specifically for Indian Railways, we have developed an improved wheel design for passenger transport in accordance with the operating conditions in India,” the company said in the press release.
Due to the new design, the carrier expects to significantly increase the safety of railway traffic after repairs of passenger rolling stock.
Interpipe NTRP has already started executing this order.
The company expects to supply the Indian national railway operator with a record volume of these wheels. It will help Interpipe to strengthen a long-term relationship with Indian Railways.
Interpipe is global producer of steel pipes and railway wheels, based in Ukraine. The company’s products are marketed in more than 80 countries all around the world via the network of sales offices located in key markets of Ukraine, Europe, North America and the Middle East.
The Ukrainian industrial company Interpipe in January-May this year increased steel production by 10.6% compared to the same period last year, to 368,200 tonnes.
According to the company’s monthly report, for the five months of 2021, pipe production increased by 6.4%, to 206,700 tonnes, the output of railway products decreased by 24.1%, to 68,000 tonnes.
In May, steel smelting amounted to 86,000 tonnes (in April – 89,200 tonnes), pipe production – 51,600 tonnes (48,300 tonnes), railway products – 13,000 tonnes (14,700 tonnes).
It is also reported that pipes in January-May of this year were sold in Europe (29%), the MENA region (25%), Ukraine (17%), the CIS (12%), the American continent (14%) and other regions (3%). In May, pipes were sold in Europe (24%), Ukraine (14%), the MENA region (30%), the CIS (11%), the American continent (17%) and other regions (4%).
Railway products for the five months of 2021 were sold in the CIS (48%), Europe (32%), Ukraine (8%), the MENA region (3%), the American continent (7%) and other regions (3%). In May – in the CIS (48%), Europe (29%), Ukraine (7%), the MENA region (2%), the American continent (4%) and in other regions (10%).
According to Interpipe’s commentary, in May 2021, the company’s trading activity continued to recover in all key products and markets in connection with the lifting of quarantine restrictions in the world and the recovery of business activity.
At the same time, the total sales of the company’s pipe products in May increased by 9.1% compared to the previous month, to 48,900 tonnes, and by 6.1% in the five months of 2021, to 198,800 tonnes.
