Unhealthy competition to hit HSAW pipe manufacturers

The pipes industry, especially in the HSAW pipe segment, is witnessing intense competition resulting in a price war, a leading HSAW player said.

HSAW pipes are primarily used for water while lately they have found acceptance from the oil and gas transportation sector as well.

"There is an unhealthy competition in the HSAW pipe segment resulting in under-quoting of prices and players quoting below raw material prices to bag contracts in the domestic market," Man Industries' Senior Vice-President (Corporate Affairs) K G Mantri told PTI here.

The global economic downturn has also resulted in falling demand from overseas markets, especially the Middle East and the US, forcing Indian players to focus on the domestic market with aggressive pricing as their main weapon.

"Earlier the Middle East was a major revenue-supplier for HSAW companies but the economic downturn has seen many orders deferred from that region. Players are now, therefore, forced to sell mainly in the Indian market, south-east Asia, Europe and the US," MF Global's Analyst Jignesh Kamani said.

Some of the leading pipe players are Man Industries, Welspun, Jindal SAW, PSL, Ratnamani and Pratibha Industries.

"Even in the US, there is now a preference to buy products from local companies which has further compounded Indian HSAW players' problems," Kamani said.