Pipe companies of Ukraine reduced the production of pipes by 38% y/y in 2022

During the year, the enterprises of the Ukrtruboprom association produced 449.7 thousand tons of pipes

In 2022, the enterprises of the Ukrtruboprom association reduced the production of pipes by 37.9% compared to the previous year – to 449.7 thousand tons. This is stated in the association’s press release.

In 2022, all pipe enterprises performed with negative dynamics. In particular, Interpipe Nico Tube and Turbostal reduced the production of seamless pipes by 31.1% y/y and 61.6% y/y, respectively. Centravis, which specializes in the production of stainless pipes, reduced the output of such products by 67.1% y/y, and Interpipe NMTZ – a producer of electrically welded pipes – reduced output by 67.1% y/y.

The production of pipes of Oscar fell by 20% y/y. Only the Ukrtruboizol reached the production level of 2021. The Dnipro Pipe Plant is idle and is at the stage of liquidation.

According to the director of the association Ukrtruboprom George Polskyi, at the end of the winter of 2022, after the invasion of Russian troops on the territory of Ukraine, almost the entire pipe industry stopped. Despite this, in the future, the plants managed to partially resume production. In the summer, enterprises had stable loading, but far from pre-war volumes.

“A new test for the industry was enemy strikes on energy infrastructure facilities. The peak of rocket attacks came in November-December, the country plunged into blackouts several times, pipe companies received severe limits on electricity and could not work rhythmically. As a result, pipe production by the end of the year collapsed even below the level of April 2022,” he added.

The results of the industry were negatively affected by the disruption of logistics chains, in particular, the blockade of Ukrainian seaports. Pipe producers had to use longer routes to deliver products to customers, which led to a 2-3 times increase in logistics costs and hit the cost price.

“Since autumn, another challenge has appeared at pipe companies – the export of scrap metal. In October-December 2022, the volume of exported raw materials amounted to about 25 thousand tons, which increased the deficit on the domestic market. At the beginning of 2023, the problem has reached a catastrophic nature, as the export of scrap amounted to 23,000 tons in just two months of the current year. This threatens the stable work of Ukrainian pipe companies,” summed up George Polskyi.

In 2022, Ukrainian pipe companies exported 400.44 thousand tons of pipes, which is 33.6% less compared to 2021. In monetary terms, exports for the year decreased by 10.1% y/y – to $688.51 million. The largest consumers of Ukrainian-made pipes were the USA, Germany and Poland.

Now the situation for pipe enterprises of Ukraine will improve, since the shelling of the energy infrastructure by the Russian army has decreased, and accordingly, the generation in the country’s energy system has stabilized. The main issue for pipe producers remains the demand for products on world markets, as well as logistical possibilities.

Centravis recently expanded its capacity by opening a new production facility site in Transcarpathia. The new enterprise will specialize in the production of tool pipes for the automotive industry. This will allow the company to improve logistics capabilities, reduce the risks of shelling of the enterprise, and ensure timely execution of contracts. The company’s main production site in Nikopol continues to operate.

As GMK Center reported earlier, in 2021, the pipe enterprises of Ukraine increased production of pipes by 15.1% compared to 2020 – to 980.7 thousand tons. In particular, enterprises that are part of the Ukrtruboprom association increased the production of pipes by 32.6% – up to 710.5 thousand tons.