Major electric resistance welded (ERW) pipe manufacturers are likely to raise their list prices in Aug’21 by INR 1,000/tonne (t) ($14/t) on the back of rising costs of hot-rolled coils (HRC) prices.
A pipe distributor from Raipur told SteelMint:“A leading structural steel tubes manufacturer is likely to announce another price hike of around INR 1,000/t during the second week of Aug’21. However, there is poor demand at present but the domestic pipes market is likely to recover in the coming weeks.”
A distributor from Tata Tubes, based in Delhi, informed:“The steel pipes mill is planning to raise list prices by INR 1,000/t on 10 Aug’21, on account of rising costs of pipe-making raw material like hot-rolled coils (HRCs).Buyers have become very price sensitive with limited buying intent,owing to subdued demand in the domestic market.”
At present, Tata Tubes is reported to be booking coil-based pipes at INR 70,000-71,000/t, ex-Jharkhand, for Aug’21 deliveries, compared to the last revised price in Jul’21 which stood at INR 68,500/t. Prices do not include GST at 18%.
The current trade offers for base grade ERW pipes (25-125 NB, 2.2-6 mm thickness) are assessed at INR 68,000/t (exy-Delhi), INR 68,250/t (exy-Pune) and INR 66,000/t (exy-Raipur). Prices do not include GST @ 18%.
Mills withdraw rebates on HRCs
In mid-Jul’21, mills had offered HRCs at INR 68,000/t exy-Mumbai (minus GST @18%), and also offered rebates of around INR 1,000/t to push up domestic sales.
In flat products, the primary mills have rolled over last month’s HRC list prices. However, they have withdrawn the trade-level rebates of around INR 1,000/t offered last month. Thus, trade prices witnessed an increase due to the rebate withdrawal although list prices remained untouched.
The mills’ list prices are assessed at INR 68,000/t while trade-level prices in Mumbai are at INR 66,500-67,000/t. There is a gap in list and trade prices since post-announcement of the list prices by the Indian mills, traders raised prices in the domestic market.Mills have lesser scope to raise prices because the end-user segment is unlikely to absorb a steep hike. Indian mills continue to explore export markets for Sept deliveries, thereby offering more scope to hike domestic prices.
Property registrations continue to grow in Aug’21
The Mumbai region recorded a 10-year high in property registrations at 9,037 units in Jul’21, according to Knight Frank India, marking a m-o-m growth of 15% over Jun’21.
Despite the impact of the second Covid wave, the real estate sector witnessed a strong pick-up in property registrations in recent months. The real estate players facilitated customer site visits and closed transactions after gradual easing of restrictions in Jun.
Way ahead
The momentum in housing sales is expected to sustain and the demand for new homes remains intact, resulting in improved demand for ERW pipes, provided the third wave does not hit the industry.
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