Traders are quite uncertain about the price changes that the electric resistance welded (ERW) pipes segment could see during the first week of Sept’21. Some are of the view that the leading structural steel tubes producers could be looking to further correct their list prices to boost sales in the domestic market.
“A leading structural steel tube manufacturer is likely to announce a correction in pipes prices owing to a likely correction in hot-rolled coil (HRC) prices. Furthermore, trading activities are slow and there is a cash flow issue in the domestic market. Meanwhile at present, pipe manufacturers are supporting their distributor channels by offering discounts in order to increase their sales volumes,”said a Delhi-based trader.
On the other hand, Tata Tubes may raise prices by INR 1,500 on 1 Sept’21, as the demand scenario in the housing sector is likely to improve from Sept onwards, as per latest information available to SteelMint.
At present, Tata Tubes is reported to be booking coil-based pipes at INR 71,000-71,800/t, ex-Jharkhand, for Aug’21 deliveries, compared to the last revised price in early-Aug’21 of INR 70,000/t. 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 70,000/t (exy-Delhi), INR 70,250/t (exy-Pune) and INR 68,000/t (exy-Raipur). Prices do not include GST @ 18%.
Housing sales back to pre-pandemic days
Mumbai has already seen 4,916 units of realty sales in Aug’21, generating revenue of around INR 310 crore in comparison to 2,642 units registered in Aug’20 generating INR 176-crore revenue.
Since August, fresh sales have been registered reflecting the market scenario of the real estate industry. Most home developers have been demanding a discount on stamp duty to be brought in once again to boost sales. However, the state government has not given a go-ahead yet.
Way ahead
Domestic hot-rolled coil (HRC) prices in the trade segment continue their downward trajectory in key markets as end-user demand remains sluggish.
SteelMint’s benchmark price assessment of 2.5-8 mm IS 2062 hot-rolled coils (HRCs) stood at around INR 66,000-66,500/t (exy-Mumbai) as compared to INR 67,000-67,500/t seen a week ago. Prices mentioned above are exclusive of GST @18%.
As per the current market scenario, domestic HRC market prices may remain under pressure for some time. Amidst uncertainty over China’s export tax announcement, falling global trade offers and subdued buying interest in both the domestic and overseas markets, the demand-supply gap is likely to persist.
Thus, as per SteelMint’s understanding, ERW pipes prices are likely to remain under pressure in the near-term.
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