The steel tube industry is one of the significant parts of the Indian steel sector. It accounts for around 8 percent of India’s steel consumption.
The Indian steel pipe market is estimated at Rs 50,000-55,000 crore. By value, 50 percent of the market is ERW tubing and 50 percent is stainless steel and SAW tubing.
Rajesh Mohata, CEO and Executive Director of JSL Lifestyle said: “Stainless steel’s robust properties, such as its high durability, tolerance to high temperatures and resistance to corrosion, have enabled positive sales growth. Most of the demand comes from HNIs, public colleges, medical colleges, hospitals, hotels and traditional centers. The main demand is for drinking water and reverse osmosis tubes.”
FY21, the overall steel pipe industry grew at double digits over the past four years and was valued at Rs 60,000 crore. According to a report by Credit Analysis and Research (CARE), the global steel pipe market is estimated at USD 90 billion and is projected to develop at a CAGR of 4 percent over the following three years, while the domestic market is expected to increase around 9-10 percent of global usage .
Sandeep Bansal, MD, Swastik Pipes, said, “Now India has emerged as the top three manufacturing centers in the world for the manufacture of steel pipe and tube, after Europe and Japan. Due to factors such as low production costs, better productivity and quality, and geographic advantages along with increasing demand.”
Market during and after Covid
The Covid-19 pandemic even caused an unexpected and sharp drop in financial activity and steel usage worldwide. Monthly production of steel pipe and tube fell by 70,000 tons in April 2020 as production activity was halted due to the nationwide lockdown.
Mohata said: “In 2020, the Asia-Pacific region had the largest market share, but the Covid-19 pandemic hampered the market and caused changes in demand and consumption patterns. We have observed that post-pandemic people are becoming more health conscious and aware of what is getting into the environment and surrounding areas. Therefore, the steel industry also experienced a decline like other sectors.”
Bansal said: “Like many other industries, the steel industry experienced a downturn during the pandemic. we faced some challenges and saw the demand for GIMS steel pipe drop up to 30 percent for a while. Due to the lack of labor, production utilization rates and consumption have been affected and there has been a visible decline. However, the decline was short-lived and the fallout could not last long.”
Business operations gradually returned to normal in FY22, with restrictions gradually being eased to contain the second wave of Covid. In addition, the government’s continued efforts to expand immunizations, strengthen health infrastructure, cope with virus attitudes and other economic measures to get the economy back on track for growth supported the growing consumption volume of steel pipes and tubes during YTD FY22. In the 10 months of FY22, the consumption of steel pipes and tubes in the country recorded a 4 percent year-on-year growth.
“Stainless steel tubing is becoming increasingly popular due to its durability and functionality. They are far less prone to corrosion and chemical leaching because they do not absorb constituents from the surrounding materials such as lead or copper. Stainless steel is a superior replacement for plastic plumbing and is fast becoming the choice for commercial, industrial and residential real estate projects. We expect 200 percent growth this year,” Mohata said.
“The steel industry recovered quickly from the pandemic and hit new highs. Both demand and prices have increased recently, and the number of orders placed by the country’s government – building and increasing demand for steel pipes and other products by announcing various programs and projects such as Jal Shakti Abhiyaan, Nal Se Jal, AMRUT and Namami Gange programs, Jal Jeevan Mission, etc. There has been a big push for infrastructure growth, including roads, railways, etc,” Bansal said.
market during inflation
It is noteworthy that in the WPI index (Wholesale Price of India, April 22) steel has only a 1.27 percent weighting in the manufactured products category. While the WPI of FY22 steel pipe is 129.4. This implies that steel and stainless steel prices have a limited impact on headline inflation in the country.
Mohata added: “Although it is a growing market, the sanitary solutions market has a small impact on the overall inflation in the country due to its small market size. It’s safe to say that there are no externalities on the sales side. Customers, as previously mentioned, are educating themselves and are willing to pay the premium for health, hygiene and safety.”