TMK update on Russian Division

In the nine months of 2014, TMK's Russian division shipped 2,144,000 tonnes of tubular products down 4.3% YoY. In 3Q 2014, the division's shipments were up 9% QoQ reaching 762,000 tonnes.

In January to September 2014, seamless pipe shipments totalled 1,329,000 tonnes, a decline of 2% YoY. In Q3 2014, shipments were up 1.3% QoQ to 440,000 tonnes.

In the nine months of 2014, shipments of seamless OCTG pipe remained almost flat YoY at 754,000 tonnes, while dropping by 18.3% QoQ to 217,000 tonnes in Q3 2014 due to a seasonal reduction in oil and gas drilling in Russia.

In the nine months of 2014, shipments of seamless line pipe remained flat YoY at 347,000 tonnes, while growing 34.6% QoQ to 134,000 tonnes in Q3 2014. The increase was due to the launch of a number of pipeline construction and related infrastructure projects.

In Q3 2014, shipments of seamless industrial pipe went up by 28.4% QoQ to 89,000 tonnes, driven by a seasonal rise in demand for this product. During the nine months of 2014, as a result of this includes shipments from TMK’s Russian facilities, TMK-Kaztrubprom and TMK GIPI to the Russian, CIS and non-CIS markets (excluding the North American market).

Considerably weaker demand from industrial companies in H1 2014, shipments went down by 11.8% YoY to 227,000 tonnes.

Welded pipe shipments declined by 7.7% to 815,000 tonnes in the nine months of 2014 as a result of lower demand for LDP and line pipe. During the nine months of 2014, LDP shipments were down 14.3% to 300 thousand tonnes due to the completion of several projects in the CIS countries.

In Q3 2014, LDP shipments were up 33.1% QoQ to 128,000 tonnes as several major pipeline projects got underway in Russia (Bovanenkovo Ukhta – 2, Southern Corridor, Kuyumba Taishet and others). In the same quarter, welded line and industrial pipe shipments amounted to 91 and 100,000 tonnes, up 18.3% and 9% QoQ respectively.