The electric resistance welded (ERW) coil-based pipe producers have kept their list prices stable this week on the back of bearish domestic market sentiments and low demand, as per the latest information shared with SteelMint.
Subdued demand and low buying interest have made the traders more cautious, leading to limited trade activities in the market.
“APL Apollo Tubes prices remain stable amid subdued demand although trading activities have started to pick up in the domestic market,” said a Mumbai-based APL Apollo Tubes distributor.
At present, Tata Tubes is reported to be booking coil-based pipes at INR 70,000/t ($937/t), ex-Jharkhand for Jul ’21 deliveries, compared to the last revised price in Jun ’21 at INR 72,000/t ($962/t). Prices do not include GST @ 18%.
SteelMint’s current trade offers as of week 29 of CY ’21 for base grade ERW pipes (25-125 NB, 2.2-6 mm thickness) are assessed at INR 70,000/t (exy-Delhi), INR 70,250/t (exy-Mumbai) and INR 68,000/t (exy-Raipur). Prices have remained unchanged since last week and do not include GST @ 18%.
Domestic HRC trade prices fall
Indian HRC trade prices registered further decline since the market is dull and bearish due to sluggish trade activities. Traders are expecting a further fall in prices, thus delaying their purchases in the domestic market.
SteelMint’s prices for the benchmark 2.5mm hot-rolled coils (HRCs) stand at INR 64,000-65,000/t (exy-Mumbai), showing a decline of INR 500-1,000/t w-o-w against INR 64,500-65,500/t (exy-Mumbai) seen last week. The prices mentioned above do not include GST @18%.
Housing sales decline 55% in Apr-Jun ’21
Property sales and new housing project launches took a severe hit, dipping by 55% as 60,000 units got sold in Apr-Jun ’21. Housing enquiries and site visits came to a sudden halt in the top eight metro cities between Apr-May ’21 with the resurgence of the second wave of Covid-19.
The recovery of the rental market was delayed as the opening of offices and educational institutions got further extended. The prices in the primary market remained undeterred as developers claimed limited profit margins amid rising input costs.
However, home sales rose 67% in H1 CY ’21 on the back of growth in markets like Pune and Mumbai in the same period, according to Kinght Frank.
The top eight cities saw total sales of 99,416 residential units in H1 ’21, while new launches in the same period (Jan-Jun ’21) were recorded at 103,238 units.
“Going by the tremendous success of the stamp duty cut in Maharashtra, other states may also consider similar demand stimuli at appropriate times that will not only help sales velocity but also propel economic activity,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
Near-term outlook
We anticipate that prices of HRCs may not correct further as export offers are up by about $5-10/t and these might rise in the upcoming weeks. Also, the Chinese futures are on an uptrend, thereby leading to no correction in ERW coil-based pipe prices, according to data maintained with SteelMint.
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