Why is there a ductile iron pipe shortage?

Water is transported through ductile iron (DI) pipes which are suitable especially for high pressure flow. Pig iron is the basic raw material for making DI pipes. The prices of pipes shot up after pig iron became costly two years ago.

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The biggest impact has been seen on projects of Maharashtra Jeevan Pradhikaran (MJP)' state's water supply department. MJP spearheads water supply in rural areas. However, the shortage of DI pipes has hit urban areas too. Arun Lakhani, the managing director of Orange City Water Works , which supplies water to Nagpur city, also confirmed a shortage of pipes, which is affecting work.

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Tenders by state government agencies are prepared on the basis of government's schedule or rates which are in turn derived from the wholesale price index (WPI), which reflects the prices of a whole gamut of goods. In , the index for pig iron was 178 as against a base of 100. In the year , the index has come down to 147, yet there has been no proportionate reduction in the rates of DI pipes, said a senior government official.
'There is a huge mismatch between supply and demand. Much of our supply goes to the DI pipe manufacturers,' said a source in an iron ore mining company.
The demand for DI pipes has gone up due to a jump in house building in rural areas too. The pipes are needed for drainage systems as well, the source said.

Nagpur: At the peak of summer, government agencies involved in water supply works are grappling with a shortage of DI pipes , with prices having doubled to Rs 98/kg.Water is transported through ductile iron (DI) pipes which are suitable especially for high pressure flow. Pig iron is the basic raw material for making DI pipes. The prices of pipes shot up after pig iron became costly two years ago.The start of the Russia-Ukraine war was one of the reasons for the price rise. Now as the pig iron rates stabilize, DI pipe prices still continue to flare. Besides, a limited number of DI pipe manufacturers as against a massive demand throughout the country adds to price pressure, say sources engaged in water supply projects.The biggest impact has been seen on projects of Maharashtra Jeevan Pradhikaran (MJP)' state's water supply department. MJP spearheads water supply in rural areas. However, the shortage of DI pipes has hit urban areas too. Arun Lakhani, the managing director of Orange City Water Works , which supplies water to Nagpur city, also confirmed a shortage of pipes, which is affecting work.Government officials and contractors say a flood of water supply works across the country has led to a shortage of DI pipes, resulting in skyrocketing of prices. There are only 7 to 8 manufacturers. The total installed capacity falls short as compared to the overall demand. As much as 7 lakh tonnes of pipes are needed while the availability is around 4 lakh tonnes, said a state government source. A large number of tenders have been issued under the Jal Jeevan Mission across the country. Use of DI pipes is inevitable in such projects. There is demand everywhere. Yet reduction in prices is expected because the raw material rates have stabilized, say government sources.Tenders by state government agencies are prepared on the basis of government's schedule or rates which are in turn derived from the wholesale price index (WPI), which reflects the prices of a whole gamut of goods. In , the index for pig iron was 178 as against a base of 100. In the year , the index has come down to 147, yet there has been no proportionate reduction in the rates of DI pipes, said a senior government official.'There is a huge mismatch between supply and demand. Much of our supply goes to the DI pipe manufacturers,' said a source in an iron ore mining company.The demand for DI pipes has gone up due to a jump in house building in rural areas too. The pipes are needed for drainage systems as well, the source said.

WHAT ACTIONS DID MCWANE DUCTILE TAKE?

McWane Ductile has been steadily implementing the plans outlined in the April communications. Significant capital investments in our domestic manufacturing facilities have positively impacted our ability to service new and ongoing strong customer demand. 

All three of our domestic pipe manufacturing facilities in Provo, Utah, Coshocton, Ohio, and Phillipsburg, New Jersey, have experienced strong results from the $60M in capital investments. While still in the middle of performing these initiatives, we are continuously evaluating the need for even further enhancements in our facilities to meet future demands and customer expectations.

McWane Ductile has also invested heavily in our people, and our partnership with our Steelworkers' Union is extremely healthy today. For example, our Ohio facility approved a new contract five months before expiration with a healthy wage increase to attract quality, safe, hardworking men and women who are proud to be #IronStrong. Our workforce also works occasional overtime to build inventory as we head into the busier summer construction months.

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