PAO TMK reported operating results for the third quarter and nine months ended September 30, 2018. For the quarter, total pipe shipments decreased 12% quarter-on-quarter, to 949 tons. Both seamless and welded pipe shipments were down 12%, mainly due to pre-planned upgrade and maintenance works at the Russian division's key production facilities, lower large diameter pipe shipments in Russia, and a decline in OCTG and line pipe shipments at the American division due to the high level of inventories built up in the U.S. during second quarter of 2018.

For the nine months, the company reported total pipe shipments grew 7% year-on-year, to 3,004,000 tons, mainly driven by higher shipments of welded pipe at the American division due to increased drilling activity in North America and higher seamless OCTG and LDP shipments at the Russian division. Seamless pipe shipments increased 1% year-on-year, to 2,025,000 tons, mainly due to higher shipments of OCTG pipe at the Russian division. Welded pipe shipments increased 19% year-on-year, to 979 thousand tons, mainly driven by higher shipments of welded pipe at the American division and increased shipments of large diameter pipe in Russia. OCTG shipments increased 8% year-on-year, to 1,422,000 tons. Shipments of premium threaded connections increased 27%, to 738,000 joints, driven by the increased complexity of hydrocarbon production projects in Russia and the U.S., where premium products are used.

The company reiterates its previous outlook for the remainder of 2018 and expects demand for OCTG in Russia to remain strong, supported by stable drilling activity and high oil prices. Demand for LDP in 2018 is not expected to fall below 2017 levels. The North American pipe market has experienced a gradual slowdown due to high levels of inventories built up during second quarter of 2018 in response to the application of Section 232. Demand has remained solid, as has the rig count, despite short-term takeaway concerns in the Permian basin. The company has observed a decrease in excess inventory and an increase in demand for certain types of pipe. In Europe, TMK expects shipments of seamless pipe to increase for the full year 2018. This is in part due to the launch of a new heat treatment facility at TMK-ARTROM, which will improve the division's sales mix with a higher share of premium pipe. Overall, the Group expects pipe shipments to increase in 2018 compared to 2017, building a foundation for the company's stronger financial performance throughout 2018 as the company guided before.