India: Key ERW pipe makers to further hike prices by INR 1,500-2,000/t in Oct

Traders are quite confident that the electric resistance welded (ERW) pipes segment could see a price hike of around INR 1,500-2,000/tonne (t) ($20-27/t) in the third week of Oct'21 on account of hike in prices of hot-rolled coils(HRCs),the key raw material used in making ERWs,and improved domestic demand.

"A leading structural steel tubes manufacturer hiked pipes prices owing to rise in HRC prices by INR 1,000/t on 11 Oct'21. Furthermore, domestic trading activities have picked up in the market leading to increased sales. Presently, pipes manufacturers are not offering any discount to their distributor channels. Distributors are expecting pipes prices to increase by INR 1,500/t in the next 3-4 days," said a Mumbai-based trader.

A Tata Tubes distributor based in Delhi said, "ERW pipes distributors are expecting a price hike of INR 2,000/t ($27/t) on 18 Oct'21. Furthermore, sales have picked up on the back of rising demand for ERW pipes in the domestic market."

At present, Tata Tubes is reported to be booking coil-based pipes at INR 72,000/t ($956/t), ex-Jharkhand, for October deliveries, compared to the last revised price in September which stood at INR 70,000-70,200/t ($943-945/t), ex-Jharkhand. Prices do not include GST at 18%.

Current trade offers for base grade ERW pipes (25-125 NB, 2.2-6 mm thickness) are assessed at INR 72,000/t exy-Delhi, at INR 72,250/t exy-Mumbai and at INR 70,000/t exy-Raipur. Prices do not include GST @ 18%.

Real estate sector gains momentum in Jul-Sept

The Indian real estate market has been showing signs of steady recovery with both residential and commercial property segments recording robust performance in the July-September quarter.

Real estate activity gained momentum during the quarter as the country began to cautiously return to normal economic tempo supported by low home loan interest rates which helped top Indian property markets move upward after a lull in the April-June quarter marked by the pandemic's resurgence and restrictions imposed by various state governments.

Top seven Indian property markets recorded over 124% y-o-y jump in housing sales, data from JLL India showed, while Knight Frank data recorded 92% rise in housing sales across eight cities.

The fourth quarter of CY'21 is expected to see heightened traction as seen in 2020, if infection levels continue to remain low and vaccination targets are achieved.

Given the current scenario, the market is expected to move towards stability in both residential and commercial segments, in terms of pricing and rentals.

Way ahead

According to domestic hot-rolled coil (HRC) traders, presently, restocking activity is quite high in the key markets and it is anticipated that the steel mills may increase prices of HRCs by INR 1,000-1,500/t in the next week.

SteelMint's benchmark price assessments of 2.5-8 mm IS 2062 HRCs stood at around INR 70,500-71,000/t (exy-Mumbai).The prices mentioned above are exclusive of GST @18%.

As per the current market scenario, domestic HRC prices are likely to increase supported by increased demand, SteelMint learned from market participants.

Thus, ERW pipes prices are likely to increase in the near term on account of rising raw material prices and domestic demand.