India: ERW patra pipe prices drop w-o-w as demand slows down in key markets

ERW patra pipe (41-60 OD) prices dropped w-o-w in both Raipur and Mandi Gobindgarh amid slowdown in finished steel demand in both markets due to which a decline in trading activities were seen in these markets compared to the previous week. Furthermore, prices decreased by INR 200/tonne (t) d-o-d on 21 June in Raipur. However, prices in Mandi Gobindgarh remained stable d-o-d due to lack of active offers from the participants.

Current steel prices are INR 45,300/t in Raipur and INR 46,800/t in Mandi Gobindgarh. Listed prices are ex-works (exw), excluding 18% GST.

Weekly, monthly average prices:

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

Raipur: Prices dropped INR 2,000/t w-o-w on Friday to INR 45,300/t from INR 47,300/t on 14 June. Monthly average prices for patra-based pipes in June declined by INR 500/t to INR 47,400/t against INR 47,900/t in May. Decline in trading activities was seen in Raipur, due to a slowdown in finished steel demand.

Mandi: Prices fell by by INR 1,600/t to INR 46,800/t on Friday from INR 48,400/t, a week ago. Trading activites in patra-based pipes in the market remained dull. In addition, monthly average prices in June declined by INR 500/t to INR 48,600/t against INR 49,100/t in May.

Demand drop:

In an effort to stimulate buyer interest, sellers implemented price reductions throughout the week across both the markets. However, these reductions did not have the desired effect, as purchasing activity remained subdued. This can be attributed to both a decline in end-user demand and adequate existing inventory levels. Additionally, ERW patra pipes prices decreased due to a decline in raw material costs.

Raw materials price impact:

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

HR strip (patra) prices decreased by INR 2,000/t w-o-w to INR 48,800/t exw Raipur as on 21 June compared to INR 46,800/t exw Raipur on 14 June. Similarly, patra prices in Mandi dropped INR 1,600/t w-o-w to INR 45,800/t as against INR 47,400/t a week ago.

Billet prices in Raipur decreased by INR 1,900/t w-o-w to INR 41,200/t exw Raipur on 21 June. In addition, billet prices in Mandi went down by INR 1,300/t w-o-w to INR 44,700 exw Mandi compared to INR 46,000/t last week.

Outlook:

ERW patra-based pipe prices are likely to remain under pressure in the near term due to the ongoing downtrend. However, buying activity might pick up if prices fall further as buyers holding off purchases might re-enter the market, potentially leading to a rise in buying activity.