India: Nepal Mills Buying Interest Weakens, Short Term Outlook Sluggish

As per market participants, purchase inquiries from Nepal's re-rollers have weakened and there are further indications of slow down due to festive season holidays & seasonal weak demand in the country.

The local mills in Nepal confirmed less bookings for Indian Billets & Wire rod as operations are likely to get disturbed due to festivals of Dussehra & Diwali.

If participants are to be believed, most of mills in Nepal will remain shut down for around a week's duration during the Dussehra festival and about 3-5 days in Diwali festival. Hence, Nepal based major mills have limited their bookings amid higher price fluctuations in Indian steel market.

The latest export offers for Indian induction grade Billets reported at around USD 460-465/MT Ex-Mill, Durgapur and loaded to rake Odisha (Eastern India). As per participants, few of deals have settled in last week-end on these quotation.

Meanwhile, demand for Wire rod heard to be weak at the offers of USD 540-545/MT Ex-Mill, Durgapur for commercial grade & 5.5mm.

On 29th Sep'18, Vizag Steel (RINL) had invited a export tender to Nepal for 5,418 MT (150*150mm) Bloom, 10,836 MT (90*90mm) Billet & 5,418 MT (5.5 & 8mm) Wire rod. The tender was expired on 3rd Oct'18

On the total offered materials, the company were able to conclude deals only for 2 rakes of Billet and remaining material was unsold due to low bids than the company expected, as reported by sources.

The company has concluded Billet export tender at close to USD 501-503/MT (Ex-Mill) for 2 rakes (equivalent to 5,418 MT) only, however bids for rest of materials was quite low, hence company cancelled it.

On an average, India's monthly Billet export to Nepal is about 100,000 MT and totally from eastern region (West Bengal, Odisha & Jharkhand). If the exports demand will remain poor, local steel prices in eastern India are less likely to find support.

As per custom data maintained with SteelMint, Nepal's billet import from India down by 20% M-o-M in Sep'18 (15th Aug to 14th Sep) and stood at 99,986 MT as against 126,041 MT in Aug'18 (15th Jul to 14th Aug).