India: ERW patra pipe prices decline in key markets as demand softens

ERW patra pipe (41-60 OD) prices declined w-o-w in both Raipur and Mandi Gobindgarh amid a slowdown in finished steel demand in both markets due to which a decline in trading activities was seen in these markets compared to last week. Furthermore, prices decreased by INR 200/tonne (t) d-o-d in Raipur and by INR 500/t d-o-d in Mandi Gobindgarh on 19 July.

Current pipe prices are INR 43,000/t in Raipur and INR 46,600/t in Mandi Gobindgarh. Listed prices are ex-works (exw), excluding 18% GST.

Weekly and monthly average prices:

Both locations reported a decline in prices this week as compared to last week.

Raipur: Prices dropped by INR 700/t w-o-w on Friday to INR 43,000/t from INR 43,700/t on 19 July. Decline in trading activities was seen in Raipur due to a slowdown in finished steel demand. Moreover, monthly average prices of patra-based pipes declined by INR 2,800/t to 43,800/t in July against INR 46,600/t in June. Trade volumes of around 3,000 t were recorded this week.

Mandi: Prices inched down by INR 400/t to INR 46,600/t on Friday from INR 47,000/t, a week ago. Trading activities in patra-based pipes in the market remained dull. In addition, monthly average prices of patra pipes declined by INR 800/t to 47,100/t in July against INR 47,800/t in June. Trade volumes of around 2,000 t were recorded this week.

Demand drops:

Despite price cuts offered in both markets, sales remained sluggish. This weak response is likely due to lower consumer demand and already sufficient inventory levels. In addition, ERW patra pipe prices fell in response to declining raw material costs.

Raw materials price impact:

Prices of key raw materials like hot-rolled strip (patra) and billets have declined w-o-w in both Raipur and Mandi.

HR strip (patra) prices decreased by INR 700/t w-o-w to INR 42,500/t exw Raipur as on 19 July compared to INR 43,200/t exw Raipur on 12 July. Similarly, patra prices in Mandi dropped INR 500/t w-o-w to INR 45,500/t as against INR 46,000/t a week ago.

Billet prices in Raipur decreased by INR 600/t w-o-w to INR 38,900/t exw Raipur on 19 July. In addition, billet prices in Mandi went down by INR 300/t w-o-w to INR 43,200 exw Mandi compared to INR 43,500/t last week.

Outlook:

Slowdown in finished steel demand is expected to continue, leading to weak buying activity. Moreover, declining raw material prices (hot-rolled strip and billets) will put downward pressure on ERW patra pipe prices. So, prices are likely to remain under pressure due to weak demand and declining raw material costs. However, if demand picks up, prices may stabilise or witness a slight uptick.