Falling production levels further lifts Nepal's domestic rebar prices by NPR 4,000/t ($34)

Nepal's rolling mills reported a further hike in rebar prices by NPR 4,000/t ($34) & the same hike was reported previous week, on w-o-w basis.

The prices rallied due to a fall in production, which is currently 60-70% as oxygen supply is restricted to the plants to give priority to healthcare.

Another reason behind the surge in rebar prices cited through the plants is the rise in billet import offers from India.

The current rebar offers are reported at NPR 88,000/t ($745) through the mid-sized plants & NPR 92,000/t ($780) through the major mills/premium brands. The prices are exw, excluding VAT, ED & size 10-16 mm.

Following a spike in Covid cases in Nepal the government there has imposed lockdown in major districts. This has also adversely impacted movement of labour, logistics & demand of steel in the country.

However, as the production is dropping sharply, the plants are raising rebar offers to match supply-demand.

As per SteelMint's assessment, IF grade billet import offers to Nepal have risen by $10 in a week & currently is hovering at $580/t exw Eastern India, equivalent to $605-610/t CPT Nepal, via road delivery. Meanwhile, Indian large mills remain out of the market due to the no fresh allocation amidst a good price realization in Ocean deals.

Outlook

Industry participants believe Nepal's domestic steel demand & production is likely to remain low for a couple of weeks. This may result in dull Indian exports demand, especially of IF grade billet & wire rod from Eastern India. Ultimately, the steel prices in Eastern India are less likely to be supported as a major proportion gets diverted for exports to Nepal.

On an average, Nepal's monthly billet imports from India is 100,000-125,000 t, while wire rod is at 20,000-25,000 t, as per statistics data maintained by SteelMint.