TMK has reduced pipe sales to a minimum since the first half of 2020
The largest producer in Russia reduced sales by the end of six months to 1,786 million tons. The company points to weak demand in the main consuming industries due to high credit rates, sanctions and restrictions on oil production under the OPEC+ deal. Analysts say that the market has slightly supported the growth in demand for drilling pipes, but consumption in this segment is expected to fall by the end of the year.
Illustrative photo: "Pipe Metallurgical Company".
Seamless pipes accounted for the majority of sales (1.341 million tons). The group's total semi-annual sales turned out to be the lowest since the first six months of 2020, when TMK sold 1.4 million tons of pipes, the Kommersant newspaper writes.
TMK's revenue in the first half of 2025 decreased by 14% to RUB 237 billion. The company noted that the negative effect of lower sales was partially offset by lower business expenses and lower prices for basic raw materials, which led to an 18.9% increase in operating profit to RUB 26.9 billion. Adjusted EBITDA decreased by 2.1% year-on-year to RUB 45.1 billion, while adjusted EBITDA margin increased by 2.4 percentage points to 19%.
In the first half of the year, the situation on the Russian steel pipe market remained difficult, TMK points out. The company noted that the tight monetary policy of the Central Bank limited investments and hampered development projects for most consuming industries.
Sanctions continued to apply, as well as restrictions on oil production due to the fulfillment of obligations under the OPEC+ deal, difficulties in finding new markets for gas sales, and postponement of major industrial and infrastructure projects. Consumers focused on reducing costs and minimizing stocks of raw materials, including pipes, according to TMK. Stable demand in the group is recorded from the energy sector, the chemical industry, and oil and gas refining.
Illustrative photo: "Pipe Metallurgical Company".
Nikanor Khalin, senior analyst at Euler, notes that, in addition to the dependence of seamless pipe sales on business activity in the Russian Federation, these volumes are also sensitive to the state of the global oil and gas market, where prices are now significantly below the levels of 2022-2024. Domestic consumption of seamless pipes, he adds, was one of the worst in the ferrous metallurgy sector — minus 15% year-on-year in the first half of the year.
According to Dmitry Kasatkin, Managing partner of Kasatkin Consulting, according to the results of the first half of this year, pipe consumption by the oil industry was slightly — by 1-2% — ahead of the figures for the first half of 2024 due to an increase in drilling volumes. Accordingly, drilling and casing pipes were the most in demand. But the number of new ones