Prices for electric-resistance-welded (ERW) HRC pipes weakened this week as buyers avoided stocking up with mill pipe prices declining.
Pipe prices are on a downward trend, according to ERW tube traders, who believe a correction is coming soon.
India’s largest ERW pipe manufacturer, APL Apollo, had announced a correction in its prices by INR 2,000/tonne (t) ($27), on 19 June ’21 on account of dwindling sales.
However, the market players subsequently became quiet and are looking for a potential price change in the near future. They have opted to wait, expecting offers to come down in the coming days.
Traders expect pipe prices to go down further by another INR 2,000/t in first week of Jul ’21.
SteelMint’s current trade offers as of week 26 of CY ’21 for base grade ERW pipes (25-125 NB, 2.2-6 mm thickness) are assessed at INR 70,000/tonne(exy-Delhi), INR 70,250/t(exy-Mumbai) and INR 68,000/t(exy-Raipur). Prices have remained unchanged since last week and do not include GST @ 18%.
“ERW pipe prices remained silent on dull demand. The drop in prices is likely to happen as consumption in the domestic market has been impacted”; said a Mumbai-based Tata Tubes distributor.
At present, Tata Tubes is reported to be booking coil-based pipes at INR 74,000/t ($998), ex-Jharkhand for Jun’21 deliveries, compared to the last revised price in May ’21 at INR 69,500/t ($952). Prices do not include GST @ 18%.
HRC prices fall further on muted demand
Indian HRC trade prices declined further by INR 1,000/t this week due to limited buying activities and slow demand in the domestic trade market.
This week, SteelMint’s benchmark prices for 2.5mm hot-rolled coils (HRCs) dropped further to INR 66,000-67,000/t(exy-Mumbai) against last week. On the other hand, major steelmakers are offering HRCs at INR 70,000-70,500/t(exy-Mumbai).The prices mentioned do not include GST @18%.
It is anticipated that domestic HRC prices may correct in the near term owing to the arrival of the monsoon season and subdued demand among buyers. Also, mills are likely to provide rebates in order to escalate buying and improve market sentiment.
Real estate sector on recovery path
The second Covid-19 wave impacted the residential property market in the April-June (2021) period. Sales in Mumbai for April-June ’21 stood at 7,400 units, which is the highest and around 30% of the total market. With new launches and sales, the housing sector displayed remarkable resilience despite localised lockdowns.
Sales in the April-June period were also dampened by the lack of site visits. But the developers are optimistic that sales will improve in the coming months.
Outlook
Monsoon is generally regarded as a lean period for the realty sector. Developers usually find it difficult to push sales and many individual buyers postpone purchases during these months.
There is a lesser number of site visits by prospective buyers and demand for property buying also goes down. This, in turn, is likely to cause a correction in the ERW pipes and tubes prices in the near future.
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