Pipe production in Ukraine decreased by 27% in January-June

In January-June 2022, Ukrainian pipe enterprises reduced pipe production by 27.1% compared to the same period in 2021, to 226.9 thousand tons, Interfax-Ukraine reported citing the data Ukrtruboprom Association.

“In January, the enterprises of Ukrtruboprom increased the production of pipes by 2.2 times compared to the same period last year, to 61.3 thousand tons, in February – by 16.2%, to 49 thousand tons, but since March, production declined,” they wrote.

In March, pipe production amounted to 3.5 thousand tons (-94.1% compared to March 2021), in April – 18.5 thousand tons (-67.9%), in May – 51.4 thousand tons (-13.5%), and in June – 43.2 thousand tons (-35.5). At the same time, the June indicator is 15.9% lower than in May.

In general, in the first half of the year, all plants showed a negative trend, in particular:

• Interpipe NIKO TUBE – production of seamless pipes decreased by 14%;
• Trubostal Pipe Plant – production of seamless pipes decreased by 44%;
• Centravis – production of stainless pipes fell by 25%;
• Interpipe Novomoskovsk Pipe Plant – production of electric-welded pipes decreased by 37.6%.

“At the beginning of the year, pipe plants increased their production amid favorable market conditions. However, the full-scale invasion of Russia into the territory of Ukraine led to a severe decline in production. In May-June, pipe makers reached 50% load compared to pre-war. Nevertheless, some plants are underloaded because of broken supply chains,” said the general director of Ukrtruboprom, Georgy Polsky.

According to him, logistics is now the main factor holding back pipe plants from being fully loaded.

Due to the termination of the work of many suppliers, as well as due to the disruptions in many traditional logistics schemes for the delivery of finished products, enterprises are forced to look for new, more costly export shipping routes. In addition, as a result of rising energy prices, the cost of production increases and its competitiveness in foreign markets decreases.

As GMK Center reported earlier, according to the results of 2021, Ukrainian pipe enterprises increased pipe production by 15.1% compared to 2020, to 980.7 thousand tons. In particular, enterprises belonging to the Ukrtruboprom association increased pipe production by 32.6% over the year – up to 710.5 thousand tons.

GMK Center also wrote, that Centravis launched production of pipes for the automotive industry and have been preparing to increase the supply of its products to the United States after the abolition of the 25% duty on Ukraine’s steel products exports to this country. Metinvest also considered the possibility of supplying welded pipes after the liberalization of access to the US market for Ukrainian products.