Indian pipe manufacturers are deferring import procurement of API-grade hot-rolled coils (HRCs) and plates, on expectations that global prices may be corrected in a few months. Trade channel check suggests that there are no enquiries at present from Indian pipe manufacturers for imports from Korea, Japan, and China.
“Currently, prices are as high as $1,400/tonne (t) CFR Kandla for X-70 API grade HRC from Korea, making imports unviable”, an API pipe manufacturer informed.
Overseas mills are operating with very limited inventory of API HRCs and plates as they are currently focusing on liquidating inventories in the Europe market because of higher realisation, SteelMint understands from reliable market sources.
A major domestic API HRC manufacturer informed that demand is need-based for API pipes as domestic prices have gone up because of increase in input costs. Some pipe manufacturers even before getting the price order (PO) floated the letter of intent (LOIs) in the market for API HRC to lock in the prices last month.
“Last month, pipe manufacturers booked only around 50,000 t of X-70 API HRCs at around INR 85,000 – 87,000/t ($1,122 – $1,148/t) levels from us”, a reliable source from a leading steel manufacturer informed SteelMint.
Current offer for X70 API-grade HRC is approximately INR 95,000/t ($1,254/t) in the domestic market, thus, pipe manufacturers moved to the sidelines as prices are likely to cool down in sometime as raw material prices have started declining.
The Government of India (GoI) has plans to invest $60 billion in the natural gas infrastructure by 2024 to increase the share of the energy mix from 6% to 15% by 2025, for which the roadmap is to increase its pipelines to 30,000 kilometres. The government has been very actively conducting a reverse auction for allocating tenders. In the last few months, Numaligarh Refinery (NRL) project’s purchase order (PO) has been awarded, IOCL and GAIL’s reverse auction (RA) has been concluded while PO is awaited. However, a steep hike in domestic API-grade HRC/plates and unviable import option are making it difficult for pipe manufacturers to execute the projects within the specified timeline.
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