Over the past two weeks, demand for Indian welded pipes from both local and foreign consumers has continued to soften. Domestic quotations of Indian ERW pipes have remained at the previous level, while export prices of Indian ERW pipes have decreased by a maximum of $20/mt over the two weeks in question. The volume of welded pipe exports from India continues to slide, revealing the slow pace of recovery in the main steel import destinations, i.e., the US and the European markets. It is expected that prices for Indian welded pipes will continue to move down in line with the softening global trend and slackening demand in the domestic market.
Domestic quotations of 2"-6" black ERW pipes made to IS 1239 or BS 1387 (light series) are at levels of INR 36,000-38,000/mt ($770-810/mt) ex-works, excluding tax and on actual weight basis. Current domestic prices of 1"-6" galvanized ERW pipes made to BS 1387 (light series) are in the range of INR 42,000-44,000/mt ($895-940/mt) ex-works.
Export quotations of 1"-6" black ERW pipes as per BS 1387 or IS 1239 are at the level $750-800/mt FOB on a theoretical weight basis. Export prices of Indian galvanized ERW pipes of 1"-6" size made to BS 1387 are at around $850-900/mt FOB.
Meanwhile, Indian mills have continued to reduce their HRC prices. Thus, state-owned steel major SAIL has cut prices across the board by INR 1,000-1,500/mt due to the prevailing market conditions and the softening global trend. The price cut is effective from June 1, 2010. Steel prices might fall further by another INR 1,000/mt during the month in line with declining global prices due to the ongoing financial crisis in Europe and the demand slowdown ahead of the monsoon season in the domestic market. Private sector steelmakers like TATA Steel, JSW and Essar are likely to follow suit soon. Market insiders say the current quarter and the next one could now pose serious challenges to steelmakers due to waning demand as well as pressure from high input costs.