India: ERW pipe manufacturer announce a hike of INR 1,000/t ($14) for Mar '21 deliveries

Major Indian pipe manufacturer have announced an increase in list price of coil-based pipes for Mar '21 deliveries on account of an uptick in Hot-Rolled Coil prices.

The effective trade offer by India's largest structural steel tubes manufacturer, APL Apollo Tubes Limited, for base grade ERW pipes (25-125 NB, 2.2-6 mm thickness) is assessed at INR 57,000/t (exy-Delhi), INR 58,250/t (exy-Mumbai) and INR 55,500/t (exy-Raipur). Prices do not include GST @ 18%. The revised prices are applicable from 11th March onwards.

Uptick in HRC prices lead to correction in ERW pipes:

Dealer channel checks suggest that demand is picking up and sales are good as compared to last week, SteelMint understands from major HRC distributors. In Feb '21, finished steel consumption was at 9.126 mn t, registering an increase of 7% annually against 8.551 mn t in Feb '20, according to provisional data released by JPC (Joint Plant Committee).

SteelMint's price for (2.5-8 mm thickness, IS2062) HRC reported an uptick of INR 750/t from last week and stood at around INR 53,500-54,000/t (exy-Delhi).

Indian steel mills are predominantly targeting the export market in March '21 with the objective of maintaining healthy sales realization as FY '21 is coming to an end. From Apr '21 onwards steel mills foresee the domestic demand to improve significantly.

Near term outlook-Pipe demand to remain healthy on account of robust sales in real estate sector:

Mumbai saw a huge surge in property registration numbers in Feb '21. Properties worth INR 11,745 crore were sold in Mumbai, up by 34% y-o-y. The consumers have grabbed the golden opportunity to purchase properties in the last few months as the bank loan interest rates are at an all-time low coupled with great property prices and reduced stamp duty benefits. In March, the sector is expecting a windfall of registrations as the consumers will try to avail of 3% stamp duty benefit before 31st March.

In addition to the above, global economy is expected to rebound strongly as the rollout of COVID-19 vaccines helps to support a cautious return to a more normal life later in the year. Strong market fundamentals in the form of sustained IT sector growth, increasing demand from sectors such as e-commerce, healthcare, FMCG and the growing presence of institutional investors will continue to drive the office market in 2021.