Vallourec reduced pipe sales by 22% y/y in the first half of the year

In the second quarter, pipe sales fell by 11.3% y/y

The French pipe manufacturer Vallourec in the first half of the year reduced the volume of sales of pipes per 22.2% in annual terms – up to 643 thousand tons. This is stated in the latest report of the company. Pipe sales fell 11.3% y/y in the second quarter – up to 351 thousand tons. The decrease in indicators is mainly due to the closure of European rolling mills and a decrease in sales in North America.

Sales volumes of iron ore in January-June amounted to 2.8 million tons, which is 17.6% less than in the first half of 2023. In the second quarter, this figure was 1.4 million tons, which is 0.5 million tons less compared to the same period of the previous year.

In the first half of 2024, Vallourec’s revenue from sales of products amounted to €2.07 billion, which is 23% less than in the first half of 2023. EBITDA was €450 million, down 35.1% y/y.

The company expects EBITDA in 2024 to fluctuate between €800-850 million due to lower prices in the US

As noted in the Vallourec report, the dynamics of the international OCTG market remains strong. Over the past few months, the company has received several contracts in the Middle East, Brazil and Africa to supply premium pipe solutions to leading global customers in the coming years.

At the same time, in the US market, prices for OCTG pipes remain under pressure from weaker than expected demand in 2024. The company informs that it maintains discipline in the pricing strategy and takes measures to compensate for these price obstacles by reducing staff costs and sourcing. Vallourec sees medium-term demand growth potential as operators look to maintain current high levels of oil and gas production in the coming years.

As GMK Center reported earlier, last year Vallourec curtailed pipe production in Germany – the French company announced the decision to close two German plants in 2022.