Pipe Prices Stable; Rising Demand for DI, MS & ERW Pipes Amidst Government Funding Releases

Key Highlights:

• Pipe Prices Remain Low: DI, MS, and ERW pipes are available at record-low prices, with sufficient supply across all sizes.
• Government Funding Boosts Demand: State fund releases in Rajasthan and Madhya Pradesh are driving renewed demand, with Maharashtra expected to follow.
• Jal Jeevan Mission Faces Delays: The government now targets 2025 to complete tap water connections in rural areas, impacting project timelines.
• Industry Investments on the Rise: Jindal Steel plans a Rs 70,000 crore expansion, and Essar Group is adding $650 million to its U.S. steel plant.
• Strategic Buying Opportunity: Contractors should secure orders now before a market rebound in February and March leads to price increases.

Pipes Price:

• 100mm K7 DI Pipes: Rs 1340 and Rs. 1380
• ERW: Rs 58000/mt (ex Raipur)

Pipes Demand & Supply:

• The market for DI, MS, and ERW pipes has witnessed a resurgence in demand, primarily driven by the gradual release of state government funds in Rajasthan and Madhya Pradesh. Maharashtra is expected to follow suit in the coming weeks, particularly for halted MJP projects.
• On the supply side, prices remain at an all-time low, with ample stock across all diameters. This makes sure that urgent delivery commitments can be met.
• While the slow movement of funds has begun, business activity is expected to gain significant momentum in February and March, further strengthening market demand. This convergence of increasing demand and readily available supply presents a strategic opportunity for buyers to secure materials at favorable prices before an anticipated market upswing.

Pipes News:

• Jindal Steel and Power (JSP) will invest Rs 70,000 crore over six years to expand its Angul unit’s capacity to 12 MTPA by year-end and 25 MTPA by 2030.
• The Andhra Pradesh cabinet canceled Rs 11,000 crore worth of Jal Jeevan Mission projects from the previous YSRCP government due to slow progress, approving fresh tenders for immediate implementation.
• Essar Group will invest an additional $650 million in its U.S. steel plant, following a previous $1.7 billion investment.
• Jal Shakti Ministry eyes 2025 to complete tap water connections in rural India, achieve sanitation goals Over 15.37 crore rural households out of a total of 19.36 crore have been equipped with tap water connections under the Jal Jeevan Mission. The Jal Shakti Ministry has set its sights on 2025 to achieve the ambitious targets of the Jal Jeevan Mission (JJM) and Swachh Bharat Mission-Gramin (SBM-G) after falling short of the 2024 deadline to provide tap water connections to all rural households.

Expert Opinion:

Delays in MJP and Jal Jeevan Mission funds have caused a temporary slowdown in business, which is expected to persist until February. Additionally, as contractors aim to achieve strong turnover in the January-March quarter, purchasing in the coming months would be a strategic move. Given this scenario, contractors are advised to book their requirements now to lock in low prices and ensure timely deliveries before market conditions tighten.