Indian Pipe Industry Faces Delivery Issues Amidst Softening Prices And Firm Demand
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The Indian Pipe industry stood stagnant throughout May 2023, whereas the demand remained firm. Manufacturers are facing delivery issues in some Pipe segments due to the rising raw material supply concerns. However, since May starting, the Pipes price movement has been softening. In this article, we will dive deep into price trends, supply concerns and the market outlook for the Indian Pipe industry.
Price Movement
- Ductile Iron Pipe- Despite the consistent prices, there is pressure for Ductile Iron Pipe prices to decrease. 100mm K7 DI Pipes are offered for between Rs. 1200-1220/meter FOR within the radius of 800 km, a correction of Rs. 40/meter was noticed compared to April 2023.
- MS ERW Pipes- The primary and secondary MS ERW Pipe and MS GI Pipe (YST-210 grade) noticed a downfall of Rs. 1-1.5/kg MoM to around Rs. 66-67/kg and 62-63/kg, respectively.
Demand And Supply Dynamics
Despite average demand, Ductile Iron Pipe producers seemed hesitant to quote prices for prompt deliveries due to overbooking and capacity utilization, sources informed Ofbusiness. The Coil and Plate manufacturers, who are holding up the raw material for rolling into Pipes, are to blame for the lengthening lead times for MS-Spiral Pipes. There are differences between industries’ rolling timelines. Even though they have reserved a sizable number of major orders, suppliers are aware that the delivery may take longer than planned.
Market Outlook
During Q4 of 2022-23 and Q1 of 2023-24, supply has been a significant problem. Contractors are urged to schedule their purchases well in advance to account for extended delivery times. The market is highly uncertain as buyers are hoping that prices will continue to steadily decline in main categories. On the other hand, market experts believe that the government’s focus on water sectors will boost Pipe demand in the domestic market.
OFB’s Insight
The Indian Pipe industry experienced stagnation in recent months, primarily due to delivery issues caused by concerns over raw material supplies. While prices remained consistent there was pressure on Ductile Iron Pipe prices to decrease. The industry faces challenges in prompt delivery and lengthening lead times, impacting the availability of certain Pipe categories. However, the government’s focus on water sectors presents a potential avenue for future growth and increased demand.
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