India: ERW patra pipe prices decline further amid sluggish demand

• Mid-week sees slight demand upturn
• HR strips, billet tags continue to dip

ERW patra pipe (41-60 OD) prices showed a further downward trend w-o-w (w-o-w) in Raipur and Mandi Gobindgarh due to weak demand in both markets. However, mid-week, both markets witnessed a boost in trade activities before sentiments weakened again towards the weekend.

D-o-d, prices dropped by INR 200/tonne (t) in both Raipur and Mandi Gobindgarh on Friday.

Current prices are at INR 40,500/t in Raipur and INR 44,100/t in Mandi Gobindgarh. Listed prices are ex-works (exw), excluding 18% GST.

Weekly price trends

Both locations reported a decline in prices this week as compared to last week.

Raipur: Prices declined by INR 500/t w-o-w to INR 40,500/t on Friday against INR 41,000 a week ago. Trade volumes of around 2,030 t were recorded this week.

Mandi: Prices edged down by INR 400/t w-o-w on Friday to INR 44,100/t from INR 44,500/t on 20 June. Trading activities for around 2,450 t were recorded this week.

Demand dull

Trading had been slow initially but got a boost as buyers who had withheld their procurements came out to buy amid improved activities middle of the week. However, end-user demand softened again and market sentiments dropped. “Sellers, on their part, continued avoiding inventory pile-ups and their buying volumes were restricted to the orders received from end-buyers,” said a central India-based market participant.

Raw material price impact

Prices of key raw materials like hot-rolled strip (patra) and billets continued to drop on a w-o-w basis in both Raipur and Mandi.

HR strip (patra) prices decreased by INR 500/t to INR 40,300/t exw Raipur as on 27 June against INR 40,800/t last week. Moreover, patra prices in Mandi slipped by INR 400/t to INR 43,100/t compared to INR 43,500/t last week.

Steel billet prices in Raipur edged down by INR 300/t w-o-w to INR 37,050/t exw on 27 June compared to INR 37,350/t on 20 June. Additionally, billet prices in Mandi recorded a drop of INR 350/t w-o-w to INR 41,000/t DAP on 20 June compared to INR 41,350/t last week.

Outlook

In the short term, prices are likely to stay subdued. Continual declines in raw material prices and slow demand amid the monsoon shall be major concerns for sellers, and might add to the pressure on prices in the near term.