Nepal mills halt fresh bookings of raw materials amid dull domestic demand, festive holidays

After hefty bookings of billets and wire rods from Indonesia, Nepal mills have halted fresh purchases citing weak domestic demand and festive holidays in October.

Domestic rebar demand in Nepal is quite dull currently, hence offers have slipped by NPR 2,000/t ($15) w-o-w with fresh offers of rebars (12mm) standing at around NPR 89,000/t ($688) exw, excluding VAT.

The offtake of finished steel products remained poor due to weak local demand. Sources opine that the liquidity crisis and upcoming festive holidays of about two weeks in October are to be blamed for this weak demand.

Billets, wire rods

Current offers of Indonesian BF-route billets were reported at around $560-565/t CFR Haldia, equivalent to $600-605/t CPT Nepal.

Meanwhile, Indian suppliers are offering BF-route billets at around $630/t CPT Nepal. However, no deals were reported in September 2022, due to competitive offers from Indonesia, when healthy orders were placed with that country. According to sources, the orders include a total of around 50,000 t of wire rods and about 25,000-30,000 t of billets.

The second lot of booked wire rods is to be shipped next week. These consignmnts will also include billets booked by major Nepalese mills during August-September, 2022.

Sponge iron

As per suppliers, sponge iron buying was quite dull this week as buyers had made active bookings in the last two-three weeks (around 42,500 t recorded by SteelMint). Hence, there was no fresh deal. As per SteelMint's weekly assessment, offers fell by $15/t w-o-w to around $455/t CPT Nepal (FeM 80%, lumps 70% and fines 30%).

Outlook

As the festive season approaches, chances are very less for active demand in the country. Hence, prices will likely remain under pressure in October 2022, informed participants based in Kathmandu, Nepal.