India: Major ERW pipe manufacturers may cut prices by INR 1,000/t in Sept'21

India's leading electric resistance-welded (ERW) pipe manufacturers are likely to reduce list prices by up to INR 1,000/t ($14/t) in mid-Sept'21 on account of sluggish domestic demand and declining hot-rolled coil (HRC) prices.

A pipes distributor from Raipur told SteelMint,"A leading structural steel tubes manufacturer is likely to announce a price decline of around INR 1,000/t ($14/t) around 15 Sept. Also, the pipe maker is already offering quantity-based discounts of up to INR 2,000/t to some traders in order to boost sales. The overall market sentiment remains bearish in the trade segment."

A Tata Tubes distributor based in Mumbai said, "ERW pipe distributors are waiting for a reduction in pipe prices this month. Furthermore, low buying interest in the trade segment has impacted the pipe market. The dealers are being offered an INR 500-1,000/t discount as well."

At present, Tata Tubes is reportedly booking coil-based pipes at INR 71,000/t ($954/t) ex-Jharkhand, for Sept deliveries compared to the last revised price in Aug which stood at INR 70,000/t ($940). 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 70,000/t (exy-Delhi), INR 70,250/t (exy-Pune) and INR 68,000/t (exy-Raipur). Prices do not include GST @ 18%.

Domestic HRC prices flat

Domestic prices for hot-rolled coil (HRC) remained rangebound this week. The current market scenario indicates further softening in market prices due to the pressure of liquidating inventories amid slow overseas and domestic market demand.

Market sentiment remains bearish in the trade segment. Distributors and dealers continue to feel the pressure of procuring from mills in the absence of healthy demand. Meanwhile, lack of buying interest among end-users has led to an accumulation of inventory in the supply chain.

SteelMint's benchmark price assessment for 2.5-8 mm IS 2062 HRC stands unchanged at around INR 65,000-66,000/t (exy-Mumbai) and CRC (IS 513 Gr O, 0.9mm) at INR 75,000-76,000/t (exy-Mumbai) in comparison with the previous week. The prices mentioned, exclude GST @18%.

Mumbai housing sales down 32% in Aug'21

Property registrations in Mumbai, the country's biggest real estate market, declined in Aug from the previous month, as the benefit of a reduced stamp duty rate offered by the Maharashtra government to new home buyers no longer exists. As many as 6,635 units were registered, a decline of 32% over Jul, according to data from the Inspector General of Registration, Maharashtra. This clearly indicates that the demand for structural pipes and tubes is likely to remain sluggish at the moment.

Outlook

It is quite evident that the market is not able to absorb the current prices and thus a correction is likely to happen in the near term. A Mumbai-based distributor added, "Buyers have become very price conscious in procuring material in anticipation of a further decline in raw material prices in the coming weeks.Currently, demand for ERW pipes continues to be slow in the domestic market."