India: Major ERW pipe producer cuts list prices for early-Aug'24 sales

A major ERW pipe manufacturer, specialising in HRC-based products, has implemented a downward price revision for its base-grade pipe (25-125 NB, 2.2-6 mm) for early-August 2024 sales, sources informed BigMint. The manufacturer has decided to reduce prices amid softening demand and declining raw material prices.

Following this adjustment, prices now stand at INR 59,000/t ($705/t) exw-Raipur, excluding 18% GST. This marks a decrease of approximately INR 2,500/t ($30/t) m-o-m from INR 61,500/t ($735/t) in July. It is worth noting that the company had previously reduced prices by INR 2,000/t ($24/t) m-o-m for early-July sales.

Moreover, the manufacturer has also decreased prices m-o-m for other regions like Hyderabad, Bangalore, Delhi, Mumbai and Pune by INR 3,500/t ($42/t). Current prices stand at INR 60,000/t ($717/t) for Delhi, Pune, Mumbai, Hyderabad and Bangalore. These prices are ex-works (exw), excluding 18% GST.

Distributor-level monthly average prices of ERW pipes in Raipur also fell by INR 1,800/t ($22/t) m-o-m to INR 58,000/t ($693/t) exy-Raipur in July against INR 59,800/t ($714/t) in June 2024.

Trade-level HRC prices decline

Monthly average prices of trade-level HRC, a key raw material for ERW pipe, decreased by INR 1,500/t ($18/t) m-o-m to INR 52,300/t ($625/t) ex-Mumbai in July against INR 53,800/t ($643/t) in June.

The HRC market is facing significant pressure due to a surge in imports and weak demand, leading to subdued market activity. Buyers are aggressively seeking price cuts and limiting purchases to only essential needs. This downward pressure from buyers is intensifying competition within the market.

India's imports of bulk HRC and plate have surged significantly, as per vessel line-up data compiled by BigMint. In July, 6,73,377 tonnes (t) were imported, with an additional estimated 1,63,557 t expected to arrive in the month of August.

However, exports have slowed down as Indian steel mills are currently focusing on domestic sales of HRC and refraining from exporting to Southeast Asia and the Middle East. This is majorly due to weak global demand, intense competition, and a seasonal downturn in key markets like Europe and the Middle East.

Outlook:

The ERW pipe market in India is currently facing downward pressure due to softening demand and declining raw material costs. The recent price cuts by a major manufacturer indicate a trend towards lower prices in the near term.

While the situation is challenging for producers, buyers are expected to benefit from reduced prices.