India: Nepal's demand for Indian billet improves

Nepal's steel production has dropped even further and currently the rolling mills are operating at less than 50% capacity, according to trade sources. Moreover, the mills which have their own furnaces (CCM) have mostly shut down amidst the rising oxygen availability crisis in the region.

There are 5-6 plants in Nepal which have their own furnaces, with a total monthly production capacity of around 50,000 tonnes(t).

It is to be noted that the oxygen required for making ingots/billets in furnaces compared to the rolling mills is quite high, that is the reason why most major mills are running their rolling mills rather than their furnaces.

Thus, with the decline in furnace production, Nepal's re-rollers' billets procurement from India have increased fill their need gaps.

SteelMint recently reported a total of about four rakes (about 10,000 t) of I- grade billet deals in the last three days at an average price of $600/t exw eastern India, which is equivalent to $625-630/t CPT Nepal.

Fresh offers from mills from the eastern India state of Odisha & West Bengal have drop by $5-10/t (d-o-d) to $595-600/t exw, equivalent to $625/t CPT Nepal, via road delivery.

In context to offers through the primary mills for B-grade billet have learned at around $700/t exw eastern India, equivalent to $715-720/t CPT Nepal, via rake delivery.

Local rebar prices surge further

Nepal's rolling mills reported a further week-on-week (w-o-w) hike in rebar prices by NPR 2,000/t($17), after consecutive hikes over the past two weeks, totaling NPR 8,000/t ($68).

The prices remained strong on supply-demand mismatch, where demand remains active due to the ongoing construction activities, while supply of rebars narrowed down following a drop in production by 50-60%.

In addition, higher cost billet import offers from India have pushed mills to keep rebar prices strong.

The current rebar offers are reported at around NPR 90,000/tonnes ($763) for the mid-sized plants and NPR 94,000/tonnes ($797) for the major mills/premium brands. The prices are exw, excluding VAT, ED and for sizes ranging over 10-16 mm.

Major part of Nepal is now under full or partial Covid-19 lockdown, according to the country's Ministry of Home Affairs. Only five districts remain open out of a total of 77 with 64 under full lockdown, while eight are under partial lockdown.

The last lockdown was scheduled to end on 12 May, but has now been extended by 15 days till 27 May'21.