Hot rolled coil (HRC) based electric resistance welded (ERW) pipes trade prices corrected by INR 1,000/t on the back of subdued sales in the domestic market.
Current trade offers for base grade ERW pipes (25-125 NB, 2.2-6 mm thickness) are assessed at INR 74,000/t exy-Delhi, INR 74,250/t exy-Mumbai and INR 72,000/t exy-Raipur. Prices do not include GST @ 18%.
“The gap between HRC- based and patra based ERW pipes is almost INR 20,000/t in the Raipur market. End users are switching to patra based pipes to meet their demand. HRC based pipe prices may further correct by up to INR 2,000 – 2,500/t in Nov’21 and a steep correction may happen by end of Dec’21,” informed a Raipur-based distributor.
“ERW pipes producers are offering INR 1,000-1,500/t discounts to distributors upon achieving their monthly sales target,” said a Delhi-based distributor.
At present, Tata Tubes is reported to be booking coil-based pipes at INR 75,500-76,000/t, ex-Jharkhand, for November deliveries. Prices do not include GST at 18%.
Tata Tubes distributors expect pipe prices to edge down by INR 2,000/t in the next week. Traders are not buying any material now in anticipation of a further decrease in prices. Pipe makers are also offering a quantity-based discount of INR 2,000/t, as per the latest information shared with SteelMint.
Why are HRC-based ERW pipes prices trade prices falling?
Domestic trade market prices of hot rolled coil (HRCs) corrected on the back of sluggish re-stocking demand from distributors as the overseas markets observed a steep price correction and have been on a continual decline since the beginning of November. This has exerted pressure on ERW pipe prices as well.
SteelMint’s benchmark price assessment for HRC (2.5-8 mm IS 2062) stands at around INR 70,500-71,000/t (exy-Mumbai) down by INR 1,100/t since last week and trade prices are likely to further correct in the near term. The prices mentioned exclude GST @18%.
Way ahead
Indian mills are likely to announce rebates on HRC prices amidst weak global demand and falling overseas market offers. A possibility of further correction in HRC price levels is likely to keep the ERW pipe prices under pressure in the near term
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