ChelPipe Announces Operational Results for Nine Months

Leading Russian manufacturer of pipe products Chelyabinsk Pipe Plant, a Metal-Expo regular exhibitor, announced its operating results for the first nine months of 2019. In nine months of 2019, the demand for large diameter pipes increased by 56 thousand tonne (+2%) compared to the same period last year, including: domestic market +104 thousand tonne (+6% YoY), CIS countries +213 thousand tonne (3.5 times YoY). Shipments to international projects for the non-CIS countries decreased by 246 thousand tonne (-39% YoY) due to the completion of two major projects: Nord Stream 2 and Turkish Stream.

In nine months of 2019, ChelPipe Group has become the largest supplier of large diameter pipes among Russian manufacturers with a market share of 29%. In nine months of 2019, LDP shipments of ChelPipe Group increased by 15.8% YoY and amounted to 699 thousand tonne Growth is mainly attributed to higher delivery volumes to the CIS countries - ChelPipe Group supplied large diameter pipes for Saryarka (natural gas pipeline for gasification of Nur-Sultan, the Republic of Kazakhstan) and TAPI (natural gas pipeline Turkmenistan–Afghanistan–Pakistan–India). The Company became the only LDP supplier for the construction of gas pipeline in Turkmenistan under TAPI project.

Total consumption of OCTG in the domestic market in the first nine months of 2019 increased by 6% YoY and amounted to 1.8 million tonne. The increase was due to higher demand for tubing. ChelPipe Group shipments increased by 9.8% YoY and amounted to 358 thousand tonne. In the reporting period the Company's share in the OCTG market stood at 19%.

In the seamless industrial pipe segment ChelPipe Group is the largest supplier in the domestic market. Total shipments in nine months of 2019 amounted to 398 thousand tonne, a decrease of 3.4% YoY. The dynamics is caused by expectations of consumers on decrease in pipe prices in the third quarter of 2019 following a decrease in prices for pipe billets.

In nine months of 2019, ChelPipe Group shipments of line pipes amounted to 101 thousand tonne, a decrease of 34% YoY. Negative dynamics was due to decreasing market demand for line pipes as a result of their replacement by cheaper welded pipes.

ChelPipe Group is one of the leading industrial groups in the Russian metallurgical industry.