PAO TMK reported operating results for the fourth quarter and fiscal year ended December 31, 2018. For the year, total pipe shipments grew 6% year-on-year, to 4,010,000 tonnes Seamless pipe shipments were up 3% year-on-year, to 2,767,000 tonnes, mainly reflecting increased shipments of OCTG pipe at the Russian division. Welded pipe shipments were up 11% year-on-year, to 1,243,000 tonnes, mainly driven by higher shipments of welded pipe at the American division and increased shipments of large diameter pipe in Russia. OCTG shipments increased 11% year-on-year, to 1,958,000 tonnes. Shipments of premium threaded connections grew 31% year-on-year, to 1,034,000 joints, driven by the increasing complexity of hydrocarbon production projects in Russia and the U.S., where premium products are used.

For the quarter, total pipe shipments increased 6% quarter-on-quarter, to 1,005,000 tonnes. Seamless pipe shipments grew 17% quarter-on-quarter, mainly driven by stronger seamless OCTG and line pipe shipments at both the Russian and American divisions. Welded pipe shipments were down 17% quarter-on-quarter, mainly due to seasonally weak demand for industrial pipe in Russia and the U.S. and a decrease in welded OCTG shipments at the American division as distributors reduced pipe inventories in anticipation of new import supplies, declining HRC prices and year-end inventory taxes. OCTG shipments increased 14% quarter-on-quarter, to 536,000 tonnes, due to seasonally strong demand for OCTG from Russian oil and gas companies and higher OCTG shipments at the American division, supported by stable drilling activity in North America. Shipments of premium-threaded connections increased 12% quarter-on-quarter, to 296,000 joints.

The company expects pipe consumption of the domestic oil and gas companies to remain strong in 2019. The increased complexity of hydrocarbon production projects in Russia is expected to result in higher demand for high tech products. In Fourth Quarter 2018, the North American pipe market continued its steady forward march into 2019 with consumption remaining flat supported by stable drilling activity in the U.S. as operators took a wait-and-see approach to falling oil prices. In Europe, it is expected that TMK sustains demand for seamless industrial pipe in 2019. The division's sales mix is estimated to include a higher share of high value-added products. Overall, it is expected that the group's pipe shipments to increase in 2019 compared to 2018, providing the basis for a stronger financial performance throughout 2019.