India’s largest structural steel tubes manufacturer, APL Apollo Tubes Limited, is likely to announce an increase of INR 2,500/t ($34) in list price of coil-based pipes in May ’21 on account of an uptick in Hot-Rolled Coil prices, according to the latest information shared with SteelMint.
The current trade offer as of week eighteen of CY ’21 for base grade ERW pipes (25-125 NB, 2.2-6 mm thickness) is assessed at INR 65,000/t(exy-Delhi), INR 66,250/t(exy-Mumbai), INR 64,000/t(exy-Raipur). Prices remain unchanged since last week and do not include GST @ 18%.
A pipe distributor from Delhi stated,“The major pipe mill is planning to announce another price hike by around INR 2,500/t in the first week of May, considering the upside in flat steel prices and tight supply.”
Higher export realizations are motivating Indian mills to raise domestic HRC prices-HRC prices continue to remain bullish, SteelMint’s benchmark prices for (2.5mm thickness) HRC stands at INR 65,000-66,000/t (exy-Mumbai). The prices mentioned are basic and do not include GST @18%.
However, Indian steel prices are still at a discount as compared to imported HRC and the spread may increase further in May ’21 as mills are likely to increase prices by a further INR 3000/t ($41).
The growth of Real estate sector in India continues to remain a question-Amid a slight pick-up in home sales during the January-March period of 2021, India’s eight prime housing markets have shown almost flat price growth and in the coming quarters too, price growth is expected to remain range-bound amid global agencies predicting a long-drawn recovery process for India’s economy due to the second wave of covid-19.
While the muted price growth, along with several other factors, has increased housing affordability in India to a great extent, the second wave of covid-19 will be detrimental to the investor spirit and impact the foreign investment volume in the country, especially from the NRI segment. Thus, we will have to wait and watch how the situation unfolds once the situation in the country is back to normal.
Outlook
The April-June quarter will most likely be impacted by the rapid spread of the virus, thereby affecting the housing sales and momentum that real estate had gained in the last two quarters. As a result, this may have repercussions on the demand for ERW pipes. Already, restrictions on interstate movement and the call to steel manufacturers and fabricators to allocate their oxygen supplies to the hospitals have put pressure on the supply chain.
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