Nyzhniodniprovsky Pipe Plant Maintains Sales Level of Railway Wheels
OREANDA-NEWS On 21 October was announced, that Interpipe Nyzhniodniprovsky pipe plant (NITR) delivered 158 kt of railway wheels in 8M08, just 2% lower y-o-y. NITR railway wheel sales levels (accounting for 35% of the company’s revenues) are being maintained in the midst of a slowdown on the steel market. As the Ukrainian steel and iron ore industry is experiencing a significant shortage of railcars, an increase in railcar output by domestic machinery plants ensures strong demand for NITR’s railway wheels. The company has produced wheels at full capacity over the past few years and plans to increase capacity by 15% in 2008.
NITR’s steel pipe output posted a 1% y-o-y increase in 9M08 and a 2% m-o-m increase in September, also suggesting that the pipe segment is looking strong. NITR is a defensive stock with a diversified sales structure that has hardly been affected by the slowdown on the steel market. In addition, the company looks set to benefit from the steel market decline as it purchases steel billets, coils and scrap, which declined in price from 30% to 50% in August-October.