The demand for API pipes in India remains healthy on the back of growing energy requirements. However, with the recent price correction that the market has observed post-the export duty announcement by the government and falling global prices, Indian steel pipe manufacturers are currently not very active. At present, they are holding sufficient stocks which are keeping them away from imports, SteelMint understands from market sources.
“Currently, there are not many inquiries for imported API HRCs from South Korea as most pipe makers are fully booked for the next one-two months. Moreover, API pipe makers have adopted a wait-and-watch stance due to volatility in the market,” SteelMint learned from a reliable source.
Domestic pipe manufacturers depend quite extensively on South Korea for sourcing API-grade hot rolled coils (HRCs) and plates for supplying to various domestic projects.
“Importing API grade HRCs and plates from South Korea is not workable at the moment,” informed a market participant.
For instance, the landed cost of imported X-70 API-grade HRCs from South Korea is higher compared to domestic prices. The import prices are at $1,060/tonne (t) CFR Kandla, which translate into around INR 82,700/t in rupee term. On the other hand, domestic offers for API HRC are heard at around INR 75,000-77,000/t ($961-987/t), while X70 plate prices are hovering around INR 78,000-82,000/t ($999-1,050/t). The prices are on FOR basis.
Apart from the above, Chinese mills, to offload increased inventories amidst a resurgence in Covid-19 and subdued domestic demand, are active in the exports market. Current offers for API HRCs from China are hovering at around $975/t (INR 76,100/t) CFR Kandla basis, while plates are at around $1,150/t (INR 89,800/t) CFR. However, these prices are not workable for Indian pipe manufacturers as India has 8.25% countervailing duty on API grade imports from China.
There are no inquiries by Indian pipe makers for API plates from Japan either, said a source.
Near-term outlook
Indian pipe manufacturers are likely to wait and watch as long as the volatility in the domestic market persists. Also, imports from South Korea have become a point of concern as soaring global oil prices — due to the Russia-Ukraine crisis — have led Korean mills to focus on the US and Canada where the demand for line pipes has gained significant momentum and the realisation is also better.
Notably, South Korea’s steel pipes exports have touched a 3.5-year high, as per data released by the Korea Steel Association.
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