Nepal: Rebar offers rise even as mills ramp up billet import volumes

Domestic rebar offers in Nepal rose by NPR 5,000/t ($39/t) w-o-w. Current offers for 12mm rebar stand at around NPR 96,000/t ($751/t) on ex-works basis, excluding VAT.

While rebar offers climbed, mills booked healthy volumes this week, largely from the primary mills (BF-route).

About seven to eight rakes (20,000-22,000 t) of BF-route billet deals were recorded this week at an average price of $635-640/t CPT Raxaul border.

For IF-route billets there was hardly any deal heard and fresh offers are at around $625/t exw Durgapur, equivalent to $650/t CPT Nepal, down $25/t w-o-w.

Amidst compeitive BF-route billet offers, mills are taking positions rather than opting for IF-route material supplied by producers.

Wire rod

However, demand for wire rod remained dull from the Nepalese mills due to the spurt in cost after imposition of steel export duty by the Indian government in May.

Fresh offers through the primary mills (SAE 1008) have fallen by around $30/t, w-o-w, to around $840/t CPT Nepal, while offers by IF mills for commercial grade were at $815-820/t CPT Nepal, down $20/t w-o-w. These offers include export duty of 15%.

Sponge iron demand slows down

Demand for sponge iron remained limited this week with healthy billet bookings and no fresh deal was reported for the iron ore lump-based DRI (C-DRI) amidst the constant price surge. As per SteelMint's weekly price assessment, offers rose by $10-15/t to $475-480/t CPT Nepal (FeM 80%, lumps 70%, fines 30%).

Only about one rake of pellet-based DRI (P-DRI) deal was concluded in the beginning of week at $415-$420/t LTW from eastern India, equivalent to $435-$440/t CPT Nepal.

Outlook

Participants are expecting that domestic finished steel demand in Nepal may improve slightly with the beginning of the new fiscal year (17 July) in the country as fund flow should improve through the government. However, major construction activities may remain slow due to seasonal factors.