India: APL Apollo slashes prices by INR 2,500/t on dwindling sales
India's largest ERW pipe manufacturer, APL Apollo, announced a downward correction in its prices by INR 2,500/tonne (t) ($34), on 23 Jul '21 on account of low sa...
India's largest ERW pipe manufacturer, APL Apollo, announced a downward correction in its prices by INR 2,500/tonne (t) ($34), on 23 Jul '21 on account of low sales, SteelMint understands from credible market sources.
The current trade offers as of week 30 of CY '21 for base grade ERW pipes (25-125 NB, 2.2-6 mm thickness) are assessed at INR 67,500/tonne (exy-Delhi), INR 67,750/t (exy-Mumbai) and INR 65,500/t (exy-Raipur). Prices have declined since last week and do not include GST @ 18%.
"Liquidity crunch and subdued demand have led to sluggish sales in the domestic market. APL Apollo Tubes may correct their list prices further by INR 1,500-2,000 in a week's time," said a pipes distributor from Delhi.
Also, Tata Tubes is likely to correct its list prices by INR 1,500-2,000/t in 2-3 days owing to slump in demand and limited sales in the domestic market, SteelMint learnt from a Tata Tubes distributor based in Mumbai.
At present, Tata Tubes is reported to be booking coil-based pipes at INR 70,000/t ($937/t), ex-Jharkhand for Jul '21 deliveries, compared to the last revised price in Jun '21 at INR 72,000/t ($962/t). Prices do not include GST @ 18%.
Domestic HRC trade prices under pressure
Amidst bearish market sentiments and sluggish sales, domestic HRC trade prices continue to remain under pressure.
SteelMint's prices for the benchmark 2.5 mm hot-rolled coils (HRC) remained unchanged at INR 64,000-65,000/tonne (t) exy-Mumbai for the second consecutive week. The prices mentioned above are exclusive of GST @18%. However, prices in the other key markets of Chennai and Faridabad saw a decline over the previous week.
SteelMint expects that prices may remain range-bound due to the increase in HRC export offers and uptrend in Chinese futures.
Delhi realty sector hit
Consequent lockdowns have brought Delhi's real estate market to a standstill.
Housing sales slumped by 70% q-o-q in Apr-Jun '21 in Delhi owing to the sporadic lockdowns since April.Residential enquiries started drying up from the first week of April.
Despite businesses reopening from June onwards, the partial lockdown persisted in some zones, slowing down the recovery process. The non-operational markets kept the unsold inventory in Delhi NCR unchanged at 1.5 lakh units in the quarter ending Jun '21.Financial adversity and sellers' unwillingness to offer discounts compelled many prospective buyers to defer their purchases.
Demand is expected to rebound if Indian mills provide price support to escalate buying. Also, the pipes manufacturers may further correct ERW prices to boost sales in the domestic market.