The decline in recent months of oil, iron ore and coal prices could have an impact on the iron ore pellet sales prices of Jindal SAW. However, new pipeline projects, resurgent US economic growth and increased demand from natural gas exploration provide strong business opportunities in the coming years, the Indian pipemaker says in a release seen by Kallanish.

The renewed focus of the Indian government on infrastructure developments, including hydrocarbon pipelines, moreover, as well as state urbanisation programmes, are likely to boost demand for Jindal SAW’s products in the near future.

The pipe producer is currently carrying out productivity improvements, debottlenecking and introducing value-added products in its seamless segment. It is also expanding iron ore beneficiation capacity with a view to increasing pelletising capacity and sourcing its complete iron ore concentrate requirement internally.

Jindal SAW’s current order-book exceeds $1 billion, with the majority ($660 million) comprising large-diameter welded pipe, while ductile iron (DI) pipe contributes $335m. Exports make up 35% of total orders, with the main markets being the Middle East, Southeast Asia and the Far East.

In the quarter through December the producer sold 101,000 tonnes of longitudinally and helical submerged arc-welded pipe (LSAW and HSAW), flat year-on-year. DI pipe sales rose 12% to 82,000t, but seamless pipe deliveries fell -13% to 32,600t and pig iron shipments plummeted -56% to 14,000t. Pellet sales surged 48% to 337,000t. Pellet production in the quarter of 300,000t represented 100% capacity utilisation.

However, “the demand for seamless pipe and tube is not picking up,” Jindal SAW says. “Falling oil prices may also have an adverse impact on OCTG product demand. The company is focusing on enlarging the product range which shall take care of the changing business environment.”

The quarter-through-December turnover rose 4% to INR 17.75bn ($288.3m), while profit after tax increased 24% to INR 619m.