India: Major ERW pipe maker may correct prices by INR 1,000-1,500/t in Dec

Traders are expecting to see a further price revision in electric resistance welded (ERW) pipes segment during the third week of Dec'21. A major HRC-based ERW pipe manufacturer is likely to correct its list prices by INR 1,000- 1,500 tonne (t) ($13-20/t) on the back of a sharp revision in HRC price levels. Hence, distributors have temporarily halted restocking activity, SteelMint understands from reliable sources.

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-Pune and at INR 70,000/t exy-Raipur. Prices do not include GST @ 18%.

At present, Tata Tubes is reported to be booking coil-based pipes at INR 70,750-71,000/t ($934-938/t), ex-Jharkhand, for December deliveries, compared to the last revised prices in early December which stood at INR 72,000/t ($951/t), ex-Jharkhand. Prices do not include GST at 18%.

A Tata Tubes distributor based in Delhi said, "The dealers have deferred their procurements at current price levels and are focusing on clearing their inventory."

Domestic HRC prices likely to correct further

The domestic prices of hot-rolled coils (HRC) declined in the second week of Dec'21 on account of slow demand, falling overseas market and correction in domestic raw material prices.

SteelMint's benchmark HRC (IS 2062, 2.5-8mm) prices were assessed at INR 66,000-67,000/t. The prices mentioned above are on an exy-Mumbai basis, and exclusive of GST @ 18%.

The buzz in the market is that there may be a correction in domestic hot rolled coil (HRC) prices in India going forward as overseas markets are observing a sharp fall in prices. Also, at present, import opportunities are being extensively explored from FTA countries.

Near-term outlook

Trade channel sources suggest that the domestic HRC prices are trading at a premium against the landed cost of imports, which is likely to keep the domestic market in check. This in turn will keep the HRC-based ERW pipes prices under pressure in the near term.