India: Steel pipe prices surge on costlier raw material

APL Apollo Tubes Limited-India’s largest structural steel tubes manufacturer on 21 May ’21 announced a third price hike in the month of May. This time by INR 2,500/t($34/t) on the list price of its coil-based pipes. The price hike is in line with the rising cost of pipe-making raw materials(hot-rolled coil) and limited supply of the same, according to the latest information shared by the company with SteelMint.

The current trade offer as of week 21 of CY ’21 for base grade ERW pipes (25-125 NB, 2.2-6 mm thickness) is assessed at INR 72,500/t(exy-Delhi),INR 73,750/t(exy-Mumbai) and INR 71,500/t(exy-Raipur). Prices had remained unchanged since last week and do not include GST @ 18%.

APL Apollo has passed on the increasing steel prices to its distributors in order to maintain margins. Also, domestic demand remains subdued as the spike in Covid-19 led to sporadic lockdowns in states across the country.

A pipe distributor from Raipur stated, “The major pipe mill is planning to announce another price hike by around INR 1,500-2,000/t on 1 June’21, considering the upside in flat steel prices and limited raw material supply.”

Steel rally pushes up ERW pipe prices

Recently, Indian mills announced an increase in HRC prices on higher global offers:

• JSW Steel announced a second hike in its list price of HRCs at the beginning of this week by INR 1,750-2,000/t. The revised list price of HRCs stand at INR 66,750-67,000/t.
• AM/NS India announced a second hike on 20 May’21 in its list prices of HRCs by INR 1,000/t.
• Effective prices of HRCs stood at INR 68,000-68,500/t.Prices are on exy-Mumbai basis, excluding GST @ 18%.

SteelMint’s benchmark prices for 2.5mm thickness hot-rolled coils (HRCs) stand at INR 65,000-66,000/t(exy-Mumbai) against INR 66,000-67,000/t seen last week. The prices mentioned do not include GST @18%.

Near-term outlook-

Domestic HRC prices continue to remain discounted as compared to international rates. Indian mills are aiming to reduce the gap between international and domestic pricing. We are likely to see steel pipe prices moving northward in the near future.