India: Major ERW pipe producer reduces list prices for early-Dec'24 sales

• Weak demand, falling input costs prompt price cut
  
  
• Liquidity crunch weighs on trade-level HRC offers
  
  

A major electric resistance welded (ERW) pipe manufacturer, specialising in hot-rolled coil-based products, reduced prices of its base-grade pipes (25-125 NB, 2.2-6 mm) for early-December 2024 sales, sources informed BigMint. The decision came in the wake of subdued demand and declining raw material prices.

Following this adjustment, prices are now at INR 55,000/tonne (t) exw-Raipur, excluding 18% GST. This marks a decrease of approximately INR 1,000/t from INR 56,000/t in mid-November. The company had previously increased prices by INR 1,000/t for mid-November sales after keeping them stable in early November.

Moreover, the manufacturer reduced prices in regions such as Hyderabad, Bangalore, Delhi, Mumbai, and Pune by INR 1,000/t to INR 57,000/t exw, exclusive of 18% GST.

However, distributor-level monthly average prices of ERW pipes in Raipur increased to INR 51,900/t exy in November against INR 51,000/t in October.

Trade-level HRC prices drop m-o-m

Monthly average prices of trade-level hot-rolled coils (HRCs), a key raw material for ERW pipes, fell by INR 200/t to INR 48,000/t ex-Mumbai in November against INR 48,200/t in October.

Subdued demand and ongoing liquidity constraints slowed market activity throughout the month. Currently, the market is relying on steel mills to provide price support to bridge the gap between trade and listed tags. However, mills' previous attempts to raise prices were not successfully absorbed by the market.

India's steel imports totalled 535,495 t in November, according to BigMint's data, down from 687,297 t in October and 776,835 t in September. Around 81,117 t are expected to arrive in early December.

Outlook

The recent price reduction of ERW pipes by a major manufacturer reflects dampened market sentiment due to weakened demand and liquidity constraints. The decline in raw material prices has further pressured margins.

While steel mills have been attempting to stabilise prices, the market's absorption capacity remains limited. The near-term outlook for ERW pipes appears cautious, with further price adjustments possible.