Indian ERW pipe manufacturers foresee price hike in Jan ’21

Indian ERW pipe manufacturers are eyeing for a substantial hike in pipe prices for Jan ’21 deliveries. APL Apollo has already made the official price hike announcement and others are likely to follow the suit, sources reported to SteelMint.

Effective trade price as on 29th Dec ’20:

• As on 29th Dec ’20,offer by India’s leading ERW pipe-manufacturer, APL Apollo Tubes Limited, for base grade ERW pipes (25-125 NB, 2.2-8 mm thickness) is assessed at INR 59,750/t (exy-Mumbai), INR 57,500/t (exy-Raipur), and INR 59,500/t (exy-Delhi). Prices do not include GST @18%.
• Tata Tubes is reported to be booking coil-based pipes at INR 60,500/t (ex-Jharkhand) for January ’21, compared to the last revised price in Dec ’20 at INR 55,500/t. Prices do not include GST @18%.

Factors contributing to price hike of ERW Pipes:

• Uptick in HRC Price: Indian steelmakers have increased the domestic flat steel prices due to tight supplies and robust demand. As on 1st Jan ’21, Tata Steel India increased HRC prices by INR 5,000/t. Effective prices of HRC stand at INR 56,000/t exy Mumbai. AM/NS India increased HRC by INR 1,000/t. The revised list prices stand at around INR 54,700-54,800/t for HRC exy Mumbai.
• Revival of Govt. infrastructure projects: Government has set construction activities in motion with various projects getting started or revived. In the month of Dec ’20, Govt laid the foundation stone for 27 highway projects in Assam. These projects have a road length of nearly 439 kilometres valued at INR 2,366 crores. Government has also inaugurated projects worth INR 11,000 crores in Karnataka. The Government has lined up a list of high-value and high-impact infrastructure projects for inauguration during the next one month.
• Revival of Real Estate Sector: Retail infrastructure projects have resumed post lockdown and are in full swing. Riding on the back of stamp duty cuts and the festive season, the residential sector in Mumbai recorded the highest-ever registrations in the month of Nov ’20 over the last nine years. A total of 9,301 units were registered in the metropolis in Nov ’20. The figures show a 67% y-o-y rise over the same month last year, according to Knight Frank India, a leading international property consultancy.

Will this price sustain in Jan ’21?

Indian steelmakers are eyeing for a substantial hike in HRC prices for Jan ’21 deliveries. Tight supplies and robust demand in the domestic market are the factors which may result in a hike in steel prices. We may expect the ERW pipe price to increase further in the near future.