Traders are quite uncertain about the price changes that the electric resistance welded (ERW) pipes segment could see during mid-and end-Aug’21. Some are of the view that the leading structural steel tubes producers could be looking to further correct their list prices to boost sales in the domestic market.
On the other hand, pipes manufacturers may raise prices by INR 1,000 post-Independence Day, as per latest information available to SteelMint.
“A leading structural steel tubes manufacturer is likely to announce a hike in pipes prices by INR 1,000/tonne (t) ($14/t) despite sluggish demand. Trading activities are slow and there is a cash flow problem in the domestic market. Furthermore, pipes makers are also dramatically boosting their distribution channels, supporting them through INR 500/t discount in order to increase their sales volumes,”said a Delhi-based trader.
“Tata Tubes is planning to raise pipes prices by INR 1,500/t on 16 Aug’21. The distributors are of the view that there will be no further price hikes this month given the subdued demand and domestic market scenario,”said a reliable Mumbai-based source.
At present, Tata Tubes is reported to be booking coil-based pipes at INR 70,000-71,000/t, ex-Jharkhand, for Aug’21 deliveries, compared to the last revised price in Jul’21 of INR 68,500/t. 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), and at INR 69,250/t (exy-Pune) and INR 67,000/t (exy-Raipur). Prices do not include GST @ 18%.
HRC market bearish on demand and supply mismatch
SteelMint’s benchmark 2.5-8 mm IS 2062 HRCs is assessed at INR INR 67,000-67,500/t exy-Mumbai compared to last week’s prices of INR 66,500-67,000/t. The prices mentioned above are exclusive of GST @18%.
We feel the prices of HRCs may reduce on limited trade and sluggish demand.Domestic HRC trade prices may witness a further decline in the near term due to poor buying in the trade market. Also, currently the domestic market’s dependence is more on CRCs than HRCs owing to good demand from the auto sector.
Housing sector charting a recovery
As soon as the restrictions were relaxed, the market showed signs of life.Mumbai,a prominent market and that was hit hard during the second Covid wave, is now treading the path to recovery. Property registrations in the Mumbai Metropolitan Region (MMR) hit a decadal high in Jul’21 at 9,037 units and has grown steadily since May’21.
The pent-up demand, historic low home loan rates, and government interventions like stamp duty waiver, are lifting market sentiments. New registrations in Jul’21 have also shown an encouraging increase and indicates that demand for new homes remains intact.
“Most of the changes observed in the sector have been structural in nature and the demand for homes is only expected to increase,”said Samantak Das, chief economist and head of research and REIS, India, JLL.
Way ahead
Currently, the stars seem to be aligned for the housing sector, therefore, realtors are hopeful of sustaining the momentum of housing sales.
Low housing loans interest rates, improved consumer and developer interest, stagnated house prices likely to further increase the affordability which in turn would propel good demand for ERW pipes in the domestic market.
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