In January-June of the current year, the enterprises of the Ukrtruboprom association, according to recent data, reduced production of pipes by 27.1% compared to the same period last year, to 226,900 tonnes.
According to a press release from the association on Wednesday, in January, Ukrtruboprom enterprises increased production of pipes by 2.2 times compared to the same period last year, to 61,300 tonnes, and in February by 16.2%, to 49,000 tonnes, but production has been declining since March.
So, in March, production of pipes amounted to 3,500 tonnes (5.9% compared to March 2021), in April – 18,500 tonnes (32.1% compared to March 2021), in May – 51,400 tonnes (86.5%), and in June – 43,200 tonnes (64.5%).
It is specified that in general, in the first half of the year, all plants showed a negative trend. Interpipe Niko Tube and Trubostal reduced production of seamless pipes by 14% and 44.4% respectively, Centravis stainless pipes by 25%, Interpipe Novomoskovsk Pipe Plant electric-welded pipes by 37.6%.
Heorhiy Polsky, General Director of Ukrtruboprom, noted that at the beginning of the year, pipe plants were increasing their output amid favorable external market conditions, which were mainly due to the post-COVID recovery of the global economy and high hydrocarbon prices. However, the full-scale invasion of Russian troops into the territory of Ukraine led to a severe decline in production: in March, almost the entire industry stopped.
PJSC Centravis Production Ukraine (Centravis Production Ukraine), part of the holding Centravis Ltd., has increased the production of pipes due to improved supplies of billets.
“The situation in production has slightly improved compared to last week. The extrusion line is running, the time for repairs has been reduced, as there is a positive trend in the receipt of the billet. The situation in the cold shop is also stable. Some of the mills have been launched due to the availability of billets, and the operation of two annealing furnaces has been resumed” , – stated in a letter from Chief Sales Officer (CSO) Artem Atanasov to Centravis customers on Friday.
According to him, the emphasis in production is on the production of pipes for instrumentation and automotive industry, but also heat exchange pipes and pipes for general purposes. There are no deviations in quality and metal consumption.
At the same time, it is noted that the logistics team of the company is constantly looking for the best and safest ways to deliver finished products to consumers. Members of the Board of Directors Yuriy Atanasov, Andrey Krasyuk, Oleksandr Joseph, Artem Atanasov remain in Ukraine and continue to work. Sales offices of “Centravis” around the world in Essen, Milan, Krakow, Lugano, Houston and Dubai are also open, financial and administrative departments, customer support work.
“We are pleased to inform you that the current EU protective measures against Ukraine will soon be lifted, which will allow Centravis to export its tubular products to the EU without paying a 25% protective duty indefinitely. The EU regulation in this regard will be officially approved in the near future and we expect it to be published in the Official Journal during May 2022,” Atanasov wrote.
“Centravis” is one of the world’s largest manufacturers of seamless stainless steel pipes, founded in 2000. Its production facilities are located in Nikopol (Dnepropetrovsk region). Included in the top 10 world players. Before the Russian aggression, more than 1,400 people worked at the enterprise.
Holding Centravis Ltd. was created on the basis of CJSC “Nikopol Stainless Pipe Plant”, service and trading companies LLC “Production and Commercial Enterprise “UVIS”. Its shareholders are members of the Atanasov family.
Owned by Centravis Ltd. 100% of the shares of PJSC “Centravis Production Ukraine” is located.
Ukraine’s leading pipe enterprises in January-November of this year increased production of pipes from ferrous metals, according to recent data, by 15.7% year-over-year, to 906,200 tonnes, including 87,100 tonnes produced in November. A source in the industry told Interfax-Ukraine, in particular, the enterprises of the Ukrtruboprom association have increased pipe production by 31.4% over this period, to 649,000 tonnes. Including in November, output amounted to 69,700 tonnes.
In a statement released on Wednesday, Ukrtruboprom welcomed a decision of the Ukrainian authorities to raise the export duty on scrap metal from EUR 58 to EUR 180 per tonne.
“Ukrainian pipe manufacturers expected this measure to restrict the export of strategic raw materials six months ago. It was from the end of spring that the export of ferrous scrap became uncontrolled, which caused a shortage of raw materials and even the import of round billets,” Ukrtruboprom Director General Heorhiy Polsky said, who signed the statement.
At the same time, he noted the timeliness of the duty hike: “It is important that the decision necessary for the Ukrainian pipe industry was made at the beginning of the winter season, when the volume of scrap procurement, the main raw material for production of seamless pipe products, is traditionally reduced.”
According to him, the new export duty will help stabilize the situation with scrap in the domestic market: pipe industry enterprises will be provided with raw materials, and people – with jobs and wages. After all, the export of highly processed products brings to the Ukrainian budget 4 times more taxes than the export of unprocessed raw materials abroad, Polsky summed up.