Indian pipe mills to hike prices end Nov on rising raw material costs: Sources

Indian pipe mills are planning to raise the list price of electric resistance welding (ERW) pipes, end of Nov'20, on account of higher HRC prices, SteelMint came to learn from market sources. Indian manufacturers recently announce 2nd price hike in HRC for Nov'20 deliveries.

The indicative price by the leading pipe manufacturer for base grade ERW pipes (25-125 NB, 2.2-8 mm thickness) is likely to be around INR 50,750/t (exy-Mumbai), INR 48,500 (exy-Raipur),and INR 50,500 (exy-Delhi).Prices do not include GST @18%.

Patra based pipe prices decreased by INR 500-600/t - Meanwhile, grades of Patra-based pipe prices has decreased by INR 500-600/t today amid declining billet prices. Current offers for base grade (41-60 OD, 2.0 -3.2 mm thickness) Patra-based ERW pipe mills are assessed at INR 41,300/t (ex- Raipur), INR 40,500/t (ex-Mandi), and INR 44,000/t (ex-Delhi).Prices do not include GST @18%.

Reasons behind the price hike:

1. Indian manufacturers announce 2nd price hike in HRC for Nov'20 deliveries-Major Indian steel mills have announced a second price hike in Nov'20 by INR 750-1000/t on the back of higher iron ore prices and improved demand in the domestic trade market. At the beginning of the month integrated steel mills had announced a steep hike in prices of HRC by INR 1,000-1,250/t for Nov deliveries

2. Supply crunch - A major concern for Indian pipe manufacturers is the strained supply of HRC as few mills are undergoing temporary maintenance shutdown. Thus tight supply drives HRC prices and, in turn, leading to higher pipe prices in the domestic market.

Optimistic steel outlook for Dec- The major pipe distributor based in Delhi stated "Major Indian pipe mills are planning to announce another price hike by around INR 1,000/t by end Nov'20, considering the upside in domestic HRC prices and tight supply."