Two of the country’s largest structural steel tubes producers, APL Apollo Tubes Ltd and Tata Tubes could be looking at further price corrections in the current week; APL Apollo has rolled over its list prices for early-Jul ’21 sales on the back of sluggish demand, SteelMint noted.
Traders are confident that a further correction is likely to be announced soon in order to boost sales in the domestic market.
APL Apollo Tubes distributors are expecting a potential further reduction of INR 2,000/tonne (t) ($27/t) in the list pipe prices in the first week of Jul ’21.
“ERW pipe prices are stable as trading in the domestic market is limited. Traders have become more cautious amidst subdued demand, leading to softening of buying interest,”said a Raipur-based APL Apollo Tubes distributor.
Tata Tubes traders expect pipe prices to edge down further by INR 2,000-2,500/t ($27-33/t) in the first week of Jul ’21, as per the latest information shared with SteelMint.
At present, Tata Tubes is reported to be booking coil-based pipes at INR 72,000/t ($962/t), ex-Jharkhand for Jul ’21 deliveries, compared to the last revised price in May ’21 at INR 74,000/t ($989/t). Prices do not include GST @ 18%.
SteelMint’s current trade offers as of week 27 of CY ’21 for base grade ERW pipes (25-125 NB, 2.2-6 mm thickness) are assessed at INR 70,000/t (exy-Delhi), INR 70,250/t (exy-Mumbai) and INR 68,000/t (exy-Raipur). Prices have remained unchanged since last week and do not include GST @ 18%.
Domestic HRC trade prices under pressure
Owing to sluggish demand in the market, Indian HRC trade prices declined sharply by INR 1,500-2,000/t this week. However, Mumbai prices remained largely moderate.
SteelMint’s benchmark prices for 2.5mm hot-rolled coils (HRCs) stand at INR 66,000-67,000/t (exy-Mumbai) this week. Prices mentioned above do not include GST @18%.
A correction is expected in domestic HRC prices in the near term due to the arrival of the monsoon, sluggish demand among buyers and limited alternatives for exports.
Real estate sector sees gradual recovery
India’s largest real estate market, Mumbai, in Jun ’21; witnessed registrations of as many as 7,857 housing units, marking a growth of 47% m-o-m against 5,360 units in May ’21 despite the second wave of the Covid-19 pandemic.The pick-up post the easing of restrictions was sharper last month as compared to last year.
Buying sentiments have improved because of low home loan rates, discounts offered by developers, extended time spent indoors and demand for larger homes.
“We are hopeful that this recovery will sustain, and the momentum will improve further keeping pace with the vaccination drive and economic revival,” said Shishir Baijal, Managing Director, Knight Frank India.
Near-term outlook
ERW coil-based pipes prices are likely to correct in the near future as steel mills are contemplating rebates on HRCs, in order to boost sales in the domestic market. Also, demand from the real estate sector across India is likely to remain subdued on the back of the monsoon which has set in.
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