India: Pipe mills could hike prices in Sep on stiff raw materials costs

Indian pipe mills are planning to raise the list price of electric resistance welding (ERW) pipes for the fourth consecutive time in Aug’20, effective from 1st Sep’20, on account of higher raw materials prices, SteelMint came to learn from market sources.

As per SteelMint’s assessment, the tentative price of pipes of base grade (25-125 OD, 2.2-8 mm thickness) is likely to be around INR 45,750/t, ex-Mumbai – up from INR 44,500/t last week.

Current offers by the leading Raipur-based ERW pipe-maker, APL Apollo, are assessed at INR 44,250/t (ex-Mumbai) and INR 42,750 (ex-Raipur).

Tata Tubes is reported to be booking coil-based pipes at INR 43,500/t (ex-Jharkhand) for September, compared to the last revised price in Aug’20 at INR 41,500/t. The mill is planning to further raise the list price by INR 1000/t, according to latest information with SteelMint.

A pipe distributor from Maharashtra stated, “Major Indian pipe mills are planning to announce another price hike by around INR 1,000-1,500/t at the beginning of Sep’20,
considering the upside in global prices and tight supply.”

Labour shortage, payment delays and liquidity crisis are major concerns for Indian pipe mills. Manufacturers are struggling to restart operations at similar capacity levels after the exodus of workers during the lockdown.

Further compounding the troubles of pipe manufacturers is higher export shipments of HRC, resulting in a tight supply of the raw material for pipe manufacturers in the domestic
market.

However, steel mills are more likely to focus on domestic sales with expectation of better price realisation in the flats segment in Sep’20 on the back of reviving demand and an Odisha-based integrated mill going on temporary maintenance shutdown thereby disrupting monthly HRC production capacity, resulting in strained supplies.

Meanwhile, grades of Patra-based pipe prices have reduced by INR 1200-1400/t in the last few days on account of slow offtake, albeit buyers being hesitant to accept even the
reduced prices.

Current offers for base grade (48 OD) Patra-based ERW pipe mills are reported at INR 34,600 -34,800/t (ex- Raipur), 38,000/t (ex-Mumbai) excluding 18% GST.