India: Major ERW pipe producer reduces list prices for early-Sep'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-September 2024 sales, sources informed BigMint. The manufacturer has decided to reduce prices amid subdued demand and declining raw material prices.

Following this adjustment, prices now stand at INR 55,000/t ($655/t) exw-Raipur, excluding 18% GST. This marks a decrease of approximately INR 4,000/t ($48/t) m-o-m from INR 59,000/t ($703/t) in August. The company had previously reduced prices by INR 2,500/t ($30/t) m-o-m for early-August sales.

Moreover, the manufacturer has also decreased prices m-o-m for other regions like Hyderabad, Bangalore, Delhi, Mumbai and Pune by INR 3,000/t ($36/t). Current prices stand at INR 57,000/t ($679/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 3,200/t ($38/t) m-o-m to INR 54,800/t ($653/t) exy-Raipur in August against INR 58,000/t ($691/t) in July 2024.

Trade-level HRC prices decline:

Monthly average prices of trade-level HRC, a key raw material for ERW pipe, decreased by INR 1,800/t ($21/t) m-o-m to INR 50,500/t ($602/t) ex-Mumbai in August against INR 52,300/t ($623/t) in July.

Several Indian flat steel producers reduced the list prices of hot-rolled coils (HRCs) and cold-rolled coils (CRCs) by about INR 1,000-2,000/t ($12-24/t) in August. Moreover, surplus inventory and cautious buying sentiment resulted in reduced trading.

BigMint's vessel lineup data shows that the total import volume reached 484,902 t by 26 August. This is lower than the 636,651 t recorded in July. An additional 192,477 t are expected to arrive by the end of August and another 318,572 t in the first half of September.

However, exports have continued to remain slow 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 experiencing a downward trend primarily driven by softening demand and declining raw material prices. Overall, the short-term outlook for the ERW pipe market appears to be cautious, with continued price pressure and limited growth prospects. Furthermore, the market is now awaiting the price announcements from primary mills for September 2024 sales.