*Correction: Indian pipe mills book 70,000 t API grade HRC on the back of govt tenders

Indian pipe mills have booked over 70,000 t API grade HRC as pipe mills were awarded with government tenders in Oct’20, SteelMint learned from market sources.

Some key inputs received by SteelMint from market participants: 

• Ratnamani Metals & Tubes booked over 20,000 t with Posco (X-70) grade at $ 660-665/t CFR
• *Man Industries booked 20,000 t with Baosteel (X-70) grade at $ 610-615/t CFR
• Jindal SAW booked 8,000 t with Posco (X-70) grade for IOCL KGPL project at $ 635/t CFR
• Welspun Corp booked 10,000-15,000 t (X-70) grade with TISCO, China at $ 625/t CFR
• Welspun Corp is under discussion to procure  11,000 t (X-65 sour plates) for IOCL Vadinar project
• Surya Roshni booked 7,000 t (X-70) grade for GAIL MNJPL project at $652/t CFR
• Surya Roshni booked 4,000 t (X-46) grade with Posco for IOCL KGPL project at $ 575/t CFR
• Surya Roshni booked 4,000 t (X-60) grade with Posco for BGRL CGD project at $ 630/t CFR

In an effort to boost Make in India initiatives, new bookings/projects are expected from state-run GAIL India in the coming months. Tenders of more than INR 1,000 crore for around 100,000 tonne steel procurement by Sep’20, has been processed already.

• An approved vendor list for the supply of steel plates (up to X-70) is used in the manufacturing of quoted line pipes for all government projects.
• Chinese API grade material is accepted in all government projects, while import duty on Chinese API grade HRC is 12.5% but for certain government projects like IGGL and GAIL, 5% project/import tax is levied. Although this is not applicable on imports from Japan and Korea as per the Free Trade Agreement (FTA)

Government tenders awarded:

Surya Roshni

• Bagged orders worth INR 137.11 crore from the Oil and Natural Gas Corporation of India (ONGC), the Hindustan Petroleum Corporation (HPCL) and Gujarat Gas for city gas distribution (CGD) and gas line projects to be executed in a period of six months
• Bagged orders aggregating to INR 272.86 crore for supply of Coated API Line Pipes to GAIL (India) for Mumbai-Nagpur – Jharsuguda pipe North-East Gas Grid Line Project Line Project & Indradhanush Gas Grid (IGGL) for North- East Gas Grid Pipe Line project
• Bagged an order worth INR 152.31 crore from Indian Oil Corporation for supplying API grade pipes for LPG pipe line venture in U.P to be executed in 10 months.
• Bagged an order worth INR 135.14 crore from Bharat Gas Resources for supplying API grade pipes for pan-India metropolis fuel distribution to be executed in 12 months.

Man Industries

• Bagged an INR 370 crore pipe supply order from IHB Private Ltd. IHB Pvt Ltd, a joint venture of Indian Oil Corporation Ltd, Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd, is implementing the 2,805-km Kandla-Gorakhpur LPG pipeline project for supply of SAW welded pipe of X-70 API grade, to be delivered in 6-8 months. This pipeline, once constructed, is expected to be the world’s longest LPG pipeline

Welspun

• Bagged multiple orders across geographies including USA, Saudi and India of approximately 106,000 t valuing close to INR 1,000 crore.

Ratnamani Metals & Tubes

• Bagged an order of INR 216 crore for the supply of coated CS (carbon steel) pipes for oil and gas sector to be executed between Jan’21 to Jan’22
• Bagged an order worth INR 90 crore in carbon steel division of the company for supplying coated CS pipes for oil & gas sector to be completed between Dec’20 to Apr’21
• Bagged two domestic orders aggregating to INR 190.00 crores in carbon steel division of the company for the supply of coated CS Pipes for Oil & Gas sector to be completed between Dec’20 to Jun’21

The government of India proposed to expand the national gas grid from 16,200 km to 27,000 km to achieve the natural gas consumption target of 15% of the energy mix by 2023, thus a steep hike in demand for API grade HRC may be expected in coming quarters.

 Correction: 

* Indian pipe mills book 70,000 t API grade HRC on the back of govt tenders (earlier qty. mentioned as 100,000t)

*Man Industries booked 20,000 t with Baosteel (X-70) grade at $ 610-615/t CFR (earlier mentioned as 32,000t with POSCO at $ 660-665/t CFR)