India: ERW patra pipe prices drop by up to INR 1,000/t w-o-w amid slow demand

• Demand pick-up expected soon, amid monsoon retreat
• Billet, patra prices decline by up to INR 1,000/t w-o-w

Indian ERW patra pipe (41-60 OD) prices declined by INR 900/tonne (t) w-o-w in Raipur and by INR 1,000/t in Mandi Gobindgarh.

Following the restocking spree that took place a couple of weeks ago, trade momentum has declined, with the previous and current weeks witnessing lacklustre demand.

While sellers have continued to receive inquiries, it has been difficult to convert them into sales. This is because prices have kept decreasing since the beginning of the month.

Price trends

Raipur: Prices declined by INR 900/t w-o-w to INR 40,300/t on Friday against INR 41,200/t a week ago. Trade volumes of 815 t were recorded this week.

Mandi: Prices fell by INR 1,000/t w-o-w to INR 42,500/t on 29 August against INR 43,500/t on 22 August. Trade volumes of 1,780 t were recorded this week.

D-o-d price trends

D-o-d, prices were lower by INR 400/t in Raipur against INR 40,700/t, while they dropped by around INR 300/t in Mandi Gobindgarh against INR 42,800/t. Listed prices are ex-works (exw), excluding 18% GST.

Raw material price impact

Prices of key raw materials such as hot-rolled strips (patra) and billets also dropped in Raipur and Mandi markets.

HR strip (patra) prices dropped by INR 900/t w-o-w to INR 40,100/t exw-Raipur as on 29 August against INR 41,000/t last week. Meanwhile, patra prices fell by INR 1,000/t to INR 41,500/t exw-Mandi as on 29 August against INR 42,500/t last week.

Steel billet prices in Raipur dropped about INR 850/t w-o-w to INR 36,600/t exw on 29 August compared with INR 37,450/t in the previous week. On similar lines, billet prices in Mandi were assessed at INR 39,400/t DAP on 29 August, down by INR 800/t w-o-w against INR 40,200/t DAP on 22 August.

Outlook

ERW patra pipe prices are likely to remain range-bound or might increase slightly in the near term. Market participants have shown optimism about some upside in the prices by the middle of next week, as they expect demand to improve with the retreat of the monsoon. Moreover, construction firms are expected to expedite progress on ongoing projects ahead of the Diwali festivities in mid-October, during which labourers migrate to their home towns. Thus, there are some positive indications about a demand improvement by the first fortnight of September.