Traders are quite confident that electric resistance welded (ERW) pipes segment could see a price hike of around INR 1,000-1,500/t in early Oct’21 on account of an expected rise in prices of hot-rolled coils (HRCs), the key raw material, and improved domestic demand.
“A leading structural steel tube manufacturer is planning to hike pipes prices owing to an expected rise in hot-rolled coil (HRC) prices. Furthermore, domestic trading activities have picked up in the market leading to increased sales. Presently, pipes manufacturers have cut their discount offerings by around INR 800-1,000/t. Distributors are anticipating pipes prices to increase by INR 3,000-4,000/t in this month,” said a Raipur-based trader.
A Tata Tubes distributor based in Mumbai said, “ERW pipes distributors continue to await an increase in prices in the first week of this month. Furthermore, sales have picked up on the back of rising demand for ERW pipes in the domestic market. The dealers are anticipating an INR 1,500/t price hike in early Oct.”
At present, Tata Tubes is reported to be booking coil-based pipes at INR 70,000-70,200/t ($943-945/t), ex-Jharkhand, for October deliveries, compared to the last revised price in September which stood at INR 71,000/t ($954/t), ex-Jharkhand. Prices do not include GST at 18%.
Current trade offers for base grade ERW pipes (25-125 NB, 2.2-6 mm thickness) are assessed at INR 71,000/t exy-Delhi, at INR 71,250/t exy-Pune and at INR 69,000/t exy-Raipur. Prices do not include GST @ 18%.
Housing sales jump amid strong demand
More than 7,500 property deals were registered in Mumbai in Sept’21 which translates into 11% increase m-o-m compared to 6,784 registrations in Aug’21, according to data from the Inspector General of Registration (IGR), Maharashtra.
Around INR 10,300 crore worth of property was sold in September, up 78% against the pre-pandemic numbers of Sept’19 and 22% versus Sept’20.
The real estate market witnessed a big jump in sales this month despite last week being slow because of ‘Shraadh’. The upcoming festive season and new launches by developers may drive growth for the housing sector.
“With the upcoming festive season, the market is gearing up for new project launches to benefit from this improved demand condition. Given the prevalence of conducive demand drivers, the sales momentum, going forward, is expected to remain strong,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
Way ahead
Domestic hot-rolled coil (HRC) prices in the trade segment continue to remain range-bound in key markets.
SteelMint’s benchmark price assessments of 2.5-8 mm IS 2062 HRCs stood at around INR 68,000-69,000/t (exy-Mumbai). The prices mentioned above are exclusive of GST @18%.
As per the current market scenario, domestic HRC prices are likely to increase supported by increased demand, SteelMint learned from market participants.
Thus, ERW pipes prices are likely to increase in the near term on the back of rising raw material prices and domestic demand.
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