A leading electric-resistance-welded (ERW) pipes producer is likely to raise list price by INR 1,000/tonne ($14/t) despite subdued demand and poor sales in the domestic market.
A pipes distributor from Delhi told SteelMint: “A leading structural steel tubes manufacturer is likely to announce a second price hike of around INR 1,000/t ($14/t) on 23 June’21. On the other hand, the pipes maker is offering INR 1,000/t discount to some dealers in order to boost their pipe sales. However, buyers have become very cautious in respect to pipe prices. Demand is likely to remain subdued in the domestic market and recovery is slow.”
“ERW pipe prices may remain silent on low demand as pipe sales and consumption have been affected. Furthermore, the market will not be able to absorb any further price hikes this month,”a Tata Tubes distributor based in Mumbai said.
At present, Tata Tubes is reported to be booking coil-based pipes at INR 71,000-71,800/t ($954-964/t), ex-Jharkhand, for August deliveries, compared to the last revised price in early August which stood at INR 70,000/t ($940). Prices do not include GST at 18%.
The current trade offers for base grade ERW pipes (25-125 NB, 2.2-6 mm thickness) are assessed at INR 69,000/t(exy-Delhi), INR 69,250/t (exy-Pune) and INR 67,000/t (exy-Raipur). Prices do not include GST @ 18%.
Domestic HRC prices under pressure
Traders and distributors are holding enough inventory in hand owing to low sales. This in turn is keeping domestic HRC prices under pressure. Also, buyers are delaying their purchases in anticipation of a further decline in prices.
Domestic HRC prices in the trade segment witnessed a further decline by INR 500-1,000/t this week. SteelMint’s benchmark price assessments of 2.5-8 mm IS 2062 HRCs stood at around INR 66,000-67,000/t (exy-Mumbai) as compared to INR 67,000-67,500/t seen a week ago. The prices mentioned above are exclusive of GST @18%.
Meanwhile, bearish sentiments in global markets and uncertainty on China’s export tax are leading to bleak demand in the domestic market too.
2021 may see 30% increase in housing launches, 35% in sales
Housing sales are expected to rise by 30% y-o-y across seven major cities to nearly 179,527 units in 2021 against 138,344 units last year. Also, the real estate sector may witness 35% y-o-y increase in housing launches this year, although demand will still be lower than the pre-Covid levels, according to property consultant Anarock.
Way Ahead
The unprecedented rise in home ownership sentiment, faster adoption of technology, digital marketing, and innovative business practices are likely to soften the overall impact of Covid-19 on the Indian residential sector which in turn would drive ERW pipe sales in the domestic market.
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