Indian Pipe Industry Experiences Active Demand: Will It Sustain?

The Indian Pipe industry, despite witnessing price reductions in Finished Flat and Long products in June 2023, has been grappling with stagnancy since May 2023. Let’s find out how supply shortages, extended delivery times, and price uncertainty have emerged as significant challenges for various segments of the industry.

Market Impacting Factors

Currently, the factors mentioned below are impacting the Indian Pipe industry:

• Ductile Iron Pipes Supply Shortages- Leading Ductile Iron (DI) Pipe manufacturers from eastern and western regions have reported overbooking until July 2023, resulting in their hesitance to provide quotes for shorter deliveries.
• Large-diameter DI Pipes (400mm and Above)- Are experiencing delivery delays of around one and a half months.
• Small-Diameter DI Pipes (Below 400mm)- Are facing severe scarcity at plants.

• ERW Pipes Stable Supply- Electric Resistance Welded (ERW) Pipes market is witnessing stable demand and supply, without any production cuts. Consequently, ERW Pipes prices are expected to remain steady.

• MS-Spiral Pipes Longer Lead Time- Manufacturers of Coil and Plate, raw materials for Spiral Pipes, are holding up the material for rolling into Pipes, OfBusiness assessed. This delay in the supply chain is contributing to lengthening lead times for MS-Spiral Pipes.

Price

• Ductile Iron Pipe- Ductile Iron Pipe (100mm K7) are available from various brands at between Rs. 1,200-1,220/meter for delivery within a radius of 800 km.

• MS ERW Pipes- The primary and secondary MS ERW and MS GI Pipe (YST-210 grade) offers at around Rs. 66-67/kg and 62-63/kg, respectively. YST-310 grade pipes are approximately Rs. 2/kg more expensive than YST-210 grade pipes.

Market Outlook

Anticipated demand improvement particularly from Indian government projects is likely to drive up Ductile Iron Pipes prices in the upcoming week. Pre-monsoon booking is expected to burden producers further, potentially leading to a Pipe price surge. Contractors are advised to schedule their purchases well in advance to account for extended delivery times, considering the supply challenges experienced during Q4 of 2022-23 and Q1 of 2023-24.

OFB’s Insight

The Indian Pipe industry is currently facing stagnancy, mainly due to supply shortages and price uncertainties. While the DI Pipe segment suffers from delays and scarcity, the ERW Pipe market maintains a stable supply. Contractors and stakeholders must proactively plan their purchases to mitigate the impact of extended delivery times and potential price increases.