Italy’s Tenaris writes off investment in Russian JV with Severstal

Italian steel pipemaker Tenaris said it has written off its investment in a Russian joint venture it had with Russian steelmaker Severstal and had suspended all sales to and purchases from Russia.

The companies’ joint venture, announced in February 2019, was expected to come online in 2022 and reach full capacity of 300,000 mt/year of welded oil country tubular goods by 2024. However, in March 2021, both companies said they were putting on hold the construction of their joint pipe plant in Surgut, West Siberia, until they had a better understanding of market changes.

In February, Tenaris said it produced 2.8 million mt of tubes in 2021, up 17%. Production of seamless tubes rose 31% to 2.5 million mt in 2021, although output of welded tubes fell 40% to 289,000 mt.

In terms of its 2022 outlook, the company said in February it anticipated further sales increases in the first half of 2022 on higher prices in North America and shipments to an offshore pipeline in Europe.

It also said it expected to see a significant recovery of sales in the Middle East and Africa in the second quarter and, despite higher energy costs in Europe, it also expected its EBITDA margin to continue to increase in H1 2022.

— Filip Warwick