India: ERW patra pipe prices drop w-o-w amid slowdown in demand

ERW patra pipe (41-60 OD) prices dropped w-o-w in both Raipur and Mandi Gobindgarh amid slowdown in demand for finished steel in both the markets. In addition, prices saw a slight decline of INR 200/tonne (t) d-o-d on 12 April 2024 in Raipur and of INR 1,00/t in Mandi Gobindgarh.

Current steel prices are INR 45,500/t at Raipur and INR 48,000/t in Mandi Gobindgarh. Listed prices are ex-works (exw), excluding 18% GST.

Weekly and monthly average:

Both locations reported drop in prices this week as compared to the last week.

Raipur: On a w-o-w basis, prices declined by INR 1,200/t on Friday to INR 45,500/t from INR 46,700/t on 5 April. However, the monthly average prices increased in April to INR 45,500/t (up from INR 43,100/t in March). Trade volumes of around 6,000 t were recorded for patra pipe in Raipur this week. Significant decline in trade volumes were seen this week amid slowdown in demand.

Mandi: Prices declined to INR 48,000/t on Friday (down from INR 49,500/t on 5 April). However, the monthly average rose to INR 48,000/t against INR 45,100/t in March. Trades in patra-based pipes were around 1,500 t this week.

Demand-price drop:

Although demand for both finished and semi-finished steel showed significant improvement last week, there has been a noticeable slowdown this week. Despite the lower prices, buyers have not been negotiating as they have an ample supply available. Instead, they are waiting for prices to drop even further. Sellers however have advance bookings available due to the good trade activities from last week and were trying to increase the price further. Due to the following reasons, price fluctuations were seen through out the week in both the markets.

Raw material price impact:

Prices of key raw materials like hot-rolled strip (patra) and billets have decreased in both Raipur and Mandi compared to the last week.

HR strip (patra) prices decreased by INR 1,200/t w-o-w to INR 45,000/t exw Raipur as on 12 April compared to INR 46,200/t exw Raipur on 5 April. Similarly, patra prices in Mandi dropped by INR 1,400/t w-o-w to INR 46,900/t as against INR 48,300/t a week ago.

Billet prices in Raipur have decreased by around INR 1,200/t w-o-w to INR 42,000/t exw Raipur on 12 April compared to INR 43,200/t exw Raipur a week back. Moreover, billet prices in Mandi went down by INR 1,350/t w-o-w to INR 45,400 exw today compared to INR 46,750/t a week back.

Outlook:

In the near term, prices are anticipated to remain within a certain range. Despite a slight decrease in demand compared to last week, market participants are predicting a gradual increase in ERW patra pipe prices in both the markets.