The international vertically integrated pipe and wheel company Interpipe and the world leader in the production of premium pipe products Vallourec (France) have terminated the implementation of a partnership project for the joint production of steel pipes for the European market due to restrictions on this market.
The company’s presentation on the results of work for January-September 2021 states: the project with Vallourec has been completed.
The Interpipe press service confirmed the termination of the joint venture’s activities to Interfax-Ukraine.
“Indeed, there is such a phrase in the presentation… Interpipe has terminated cooperation with Vallourec within the framework of a joint venture established in April 2018 for the production of line pipes with their subsequent sale in the EU market,” the press service told Interfax-Ukraine.
As explained, Interpipe was forced to make the decision due to the impossibility of fully utilizing the capacities of this joint venture due to the preservation of quotas and duties on Ukrainian pipe products in the European market.
“At the moment, Interpipe and Vallourec no longer produce and sell pipe products in the EU market under the JV. Since October, line pipes in the European market have been sold under the Interpipe brand, as it was before the joint venture was established,” the company said.
The main pipe enterprises of Ukraine in January-October this year increased production of pipes from ferrous metals, according to recent data, by 15.9% compared to the same period last year – to 821,600 tonnes, in particular in October – 79,300 tonnes, while in September – 93,900 tonnes. Ukrtruboprom told Interfax-Ukraine, in particular, the enterprises of the association increased production of pipes by 30% in the ten months – up to 581,800 tonnes, while in October, compared to the same period last year, they increased production by 46.6%, but reduced by 9.3% from September 2021, to 67,600 tonnes. Ukrtruboprom Director General Heorhiy Polsky said Interpipe Niko Tube and Trubostal are showing positive dynamics, which in the ten months increased pipe production by 95.7% and 21.4%, respectively. At the same time, Centravis reduced production of stainless steel pipes by 5.9%, Interpipe Novomoskovsk Pipe Plant – electric-welded pipes by 30.1%.Dnipropetrovsk Pipe Plant has already been declared bankrupt by the court and is in a state of liquidation. The chances of resuming production at it tend to zero.“Favorable conditions on foreign markets have been the main driver of growth in the production of seamless pipes at Ukrtruboprom enterprises for the eighth month in a row. World oil and gas prices, while maintaining high levels, provide good support for the consumption of oil and gas pipe products,” the CEO said. At the same time, he pointed out that high prices for energy resources in Ukraine continue to negatively “put pressure” on the cost of production of pipe plants. In addition, manufacturers of seamless pipes still experience a shortage of scrap metal, the main raw material for production, especially in the run-up to winter.
The main pipe enterprises of Ukraine in January-August this year increased production of pipes from ferrous metals, according to recent data, by 21.6% compared to the same period last year, up to 655,100 tonnes, in August – 90,800 tonnes.
The Ukrtruboprom association told Interfax-Ukraine the enterprises of the association during this period increased the production of pipes by 26%, to 442,500 tonnes. In particular, in August, the enterprises belonging to the Ukrtruboprom association increased production by 54.9% compared to the same period last year, to 70,000 tonnes, compared to July – by 11.3%.
According to Heorhiy Polsky, the director general of Ukrtruboprom, Interpipe Niko Tube and Trubostal have shown positive dynamics, which in the eight months increased their pipe production by 84.1% and 27.3%, respectively. At the same time, Centravis reduced the production of stainless steel pipes by 2.4%, Interpipe Novomoskovsk Pipe Plant – electric-welded pipes by 30.8%.
At the same time, Dnipropetrovsk Pipe Plant continues to be idle.
“The favorable situation on the foreign markets continues to have a positive impact on the Ukrainian pipe industry. Ukrtruboprom enterprises have been increasing the production of seamless pipes for the sixth month in a row,” the CEO said.
According to him, the demand for oil and gas products is at a high level due to the increase in world prices for hydrocarbons. At the same time, the consumption of line pipes is also stable. Another positive factor: an increase in shipments of premium pipe products, that is, the Ukrainian Truboprom is increasing the share of complex orders.
Polsky also pointed to an increase in the production of welded pipes: since the second half of the year, strip prices have stabilized, which allowed the plants to resume normal operation.
The main pipe enterprises of Ukraine in 2020 reduced the production of pipes from ferrous metals, according to recent data, by 16.3% compared to the previous year, to 854,000 tonnes, including 71,000 tonnes produced in December.
As the Ukrtruboprom association told Interfax-Ukraine, in particular, the enterprises of the association last year reduced the production of pipes by 24.8%, to 538,000 tonnes, including 44,000 tonnes produced in December.
At the same time, according to preliminary data, the output of pipes at Interpipe Nyzhniodniprovsky Pipe Rolling Plant for the specified period fell by 33.7%, to 145,000 tonnes (in December it was 15,300 tonnes), at Interpipe Novomoskovsk Pipe Plant by 23.9%, to 78,600 tonnes (4,600 tonnes). Interpipe Niko Tube cut production by 16.5%, to 293,700 tonnes (22,200 tonnes).
Dnipropetrovsk Pipe Plant produced 300 tonnes of pipes, while in 2019 it produced 17,600 tonnes of these products. Centravis cut production by 9.3%, to 19,050 tonnes of stainless pipes (1,600 tonnes).
Trubostal plant reduced its output by 42.9%, to 1,600 tonnes of pipes (100 tonnes).
Mariupol Illich Iron and Steel Works, which is not included in the association Ukrtruboprom, reduced pipe production by 4.2%, to 151,600 tonnes (in December it was 12,300 tonnes), while Kominmet increased by 12.2%, to 164,600 tonnes (14,900 tonnes).
Earlier, Ukrtruboprom said that in 2019 Ukraine reduced the production of pipes by 9.1% compared with 2018, to 1.002 million tonnes. Including the enterprises of the association reduced the production of pipes by 10.2%, to 715,100 tonnes.
