Indian primary mills are planning to raise the list price of ERW (Electric resistance welding) pipes for the second time in Sep’20, which will be effective from 16th Sep on account of higher HRC prices, SteelMint came to learn from market sources.
As per SteelMint’s assessment, the tentative price of pipes of base grade (25-125 OD, 2.2-8 mm thickness) is likely to be around INR 46,750/t, ex-Mumbai – up from INR 45,750/t last week.
Current offers by the leading Raipur-based ERW pipe-maker, APL Apollo, are assessed at INR 45,750/t (ex-Mumbai).
Tata Tubes is reported to be offering coil-based pipes at INR 46,500/t (ex-Jharkhand) for mid-Oct- early Nov bookings, compared to the price at INR 43,500/t in end Aug. The mill is not planning to further raise the list prices. In fact, the domestic rates may stay put, according to latest information with SteelMint.
A pipe distributor from Maharashtra stated, “Major Indian pipe mills are planning to announce another price hike by around INR 1,000/t at the third week of Sep’20, considering the upside in global prices and tight supply.” “Also, the attitude of the buyers has become very price sensitive.”
Labour shortage, payment delays and liquidity crisis continue to be major concerns for Indian pipe mills. Manufacturers are struggling to restart operations at similar capacity levels after the exodus of workers during the lockdown.
Domestic HRC prices exhibited mixed responses on a weekly basis. In Mumbai, trade prices fell slightly in limited trades.
However, in other regions prices moved up by INR 750-1000 on short supply and improved sales in the domestic market. Further exacerbating the troubles of pipe manufacturers is higher export shipments of HRC, resulting in tight supply of the raw material for pipe manufacturers in the domestic market.
Although, steel mills are more likely to focus on domestic sales with expectation of better price realization in the flats segment in Sep’20 on the back of reviving demand. There is expectation of increased demand and sales in Oct’20 and Nov’20 ahead of the upcoming Diwali festival.
Meanwhile, prices of Patra-based pipe prices have increased by INR 200-400/t in the last few days on account of slow offtake, while buyers are hesitant to accept even the reduced prices.
Current offers for base grade (48 – 60 OD, 2.2-3.2 mm thickness) Patra-based ERW pipe mills are reported at INR 35,100-35,500/t (ex- Raipur), excluding 18% GST.
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