Drawing steel pipes goes up by 200,000 won per ton, effective with shipments in May In accordance with a rise in the prices for hot-rolled coils (HR), rawmaterials for steel pipes, the prices not only for steel pipes, but also for processed products of steel pipes are advancing. In the case of drawing steel pipe sectors, the cash discount rates appliedto the purchase of base pipes have been scrapped and the payment conditions for the purchase have become complicated with the additionof interests to the buying amount when making the payment by promissory notes. Thus, the selling prices for drawing steel pipes would be raised by about 200,000 won per ton, effective from shipments in May. Both covered steel pipe sectors and pre-insulated steel pipe sector are planning to announce another price increase schedule soon, following the previous one in March. An official at a covered steel pipe maker said, ‘We are in a position to raise our selling price by more than 25%, as base steel pipe price has increased 20% anddiscount for cash payment has been abolished.‘ However, it was known to be difficult for them to raise their price in the supply to municipal gas suppliers, with which they made annual supply contract at the fixed unit price. Meanwhile, covered steel pipe makers are presumed to have absorbed the entirecost increase burden by themselves in March in the wake of a rise in base steel pipe price in February, as the application to the cost increase portion to their selling price was made from April. According to another official, in the case of covered steel pipe sector, it is difficult to apply the increased cost for base pipes to the sellingprice for their covered steel pipes in the sales to municipal gas suppliers, as it is a buyer's market in the case of covered steel pipe makers who are much smaller than municipal gas suppliers in size. Pre-insulated steel pipe makers are also in a difficult position to increase theirprices fixed by the annual supply contract in the sales to Korea District Heating Corp. Meanwhile, steel pipe processing sectors have suffered a lot of difficulties in purchasing base steel pipes. According to industry sources, steel pipe processors had tried, but in vain, to increase their purchase volume of base pipes before a price hike, as steel pipe makers were unable to keep sufficient inventories of products or raw materials to cope with such a rise in speculative demand. Since the processorsare experiencing difficulties in securing base pipes like this, production volume is showing a downward trend this year. jieun@snmnews.com