CHICAGO OAO TMKs
Americas operations were squeezed in the third quarter by lower
prices and "softening market conditions" as a decline in
drilling activity and import pressure took a bite out of
The Moscow-based parent of steel
tube and pipe maker TMK Ipsco, Downers Grove, Ill., said in
remarks released with earnings data Tuesday that it expected a
challenging fourth quarter in the region, given a lower drill
rig count, continued high levels of imports and customer
efforts to manage inventories.
The rig count, a key indicator
of demand for energy tubulars such as oil country tubular goods
(OCTG), stood at 1,817 rigs last week, down 183 from the same
period last year (
amm.com, Nov. 26). While the number of rigs
drilling for oil has increased by 258 over that period, the
number drilling for natural gas has fallen by 437 rigs,
according to data from oilfield service firm Baker Hughes Inc.,
But a strong growth in the oil
rig count seen earlier in the year did not continue into the
third quarter, and the gas rig count continued to decline, TMK
On the import front, the United
States brought in 260,699 tonnes of OCTG in October, according
to preliminary U.S. Commerce Department data, down 6.6 percent
from 279,108 tonnes the previous month but up 5.4 percent from
247,379 tonnes in October 2011.
TMK Ipsco said that while U.S.
imports had fallen slightly in the third quarter, they still
continued to exceed domestic shipments. Even given those
headwinds, TMK said it was sticking to its positive long-term
view of the U.S. market.
TMK posted group net income of
$69 million for the third quarter, down 9.2 percent from $76
million in the second quarter, on revenue that dropped 9.2
percent to $1.6 billion. Net income for the first nine months
of the year fell 10.4 percent to $250 million from $279 million
in the same period last year on revenue that dipped 1.8 percent
to $5.1 billion.
In the Americas, TMK Ipsco
recorded third-quarter revenue of $410 million, down 9.2
percent from $448 million in the second quarter, on sales
volumes that fell 9.7 percent to 214,000 tonnes.
Outside of the Americas, TMK saw
markets continue to deteriorate in Europe due to the
regions debt crisis. However, the company said it had
high hopes for the Russian oil and gas sector, where strong
demand for energy tubulars should provide the foundations for
better fourth-quarter results.