Global prices of API grade hot rolled coils have remained range-bound this week.
Domestic prices have declined owing to dull demand in the market. Indian mills producing API grades are not very active at the moment.
Import offers
There are no current offers from China for X70 grade API HRCs and HR plates. The offer for X70 API HRC for Korea stands at $975-1,000/t CFR Kandla for November shipments.
There are also no recent export allocations from China for X70 API plates. The current offer from Japan is assessed at $1,600/t and from Korea, at $1,050-1,100/t CFR Kandla.
In China, there is still lack of clarity on an expected export tax announcements. Further, increased marine freight rates and logistical disruptions due to Covid-19 have led to production cuts across mills. There is no current allocation for India, as reported by sources.
The import prices for API X70 grade from Korea are not viable at the moment as offers from the domestic suppliers are much cheaper. Domestic offers for API X70 HRC is assessed at around INR 73,000-74,000/t ($984-997/t).
Buyers defer purchases
Buyers continue to defer procurements at the current high import price levels and prefer to source material from the local mills. A western India-based source said: “Prices of domestic API X70 HRC may increase by INR 1,000-2,000/t in the first week of October and there’s a possibility of another hike of INR 1,000-1,500/t in the middle of the next month.”
“Most of the pipe manufacturers are idle and awaiting projects to be awarded in Oct’21,” a Mumbai-based trader said.
Dedicated pipe manufacturers are not facing any challenge in procuring raw material from mills like Tata, AM/NS India and JSW as they have enough supply of raw material for laying down API pipelines for various projects.
Presently, the pipe producers are not dependent on raw material from overseas markets. Furthermore, there is no cash flow constraint in the execution of pipelines.
The Mumbai-Nagpur-Jharsuguda Gas Pipeline (MNJPL) is a natural gas pipeline under construction in India. Gas Authority of India Limited (GAIL) had received permission from PNGRB to build the pipeline, which was expected to take 22 months. The reverse auction for MNJPL for 30,000 t of API 5L X70 PLS2 was concluded a few days ago and awarded to a Maharashtra-based company, Topworth Pipes and Tubes.
Also, Mega Pipes and Allied Industries has won one tender for 20,000 t of pipes at around INR 93,000/t for the MNJPL project. According to the domestic market, this price is much lower than what others had quoted. This price would translate API grade plate prices to INR 69,000/t, notes SteelMint.
Recently, a leading Korean mill has booked one shipment of 20,000 t of API grade (special quality) plates at around $1,200-1,250/t CFR India for Nov/Dec shipment for a global project with Welspun Corp Ltd, SteelMint understands from market sources.
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