Nepal: Rebar prices fall amid sluggish sentiments ahead of annual budget

Nepal's domestic rebar prices fell by NPR 4,000/t ($32/t) w-o-w. Prices fell due to a sharp decline in Indian steel prices following the recently announced export duties on several steel products.

Sluggish sentiments affected local steel demand in Nepal amidst expectations of further softening in offers ahead of the country's budget presentation on 29 May'22.

• Fresh offers for 12mm rebar stood at around NPR 99,000/t ($798) on ex-works basis, excluding VAT, down NPR 4,000/t, as per SteelMint's weekly assessment.
  
  

Market participants informed that Nepal's government may announce some hike in the tax structure in the upcoming budget.

This has also impacted fresh purchases by Nepalese producers as no major fresh export deals were reported from the Indian suppliers for sponge iron, billets and wire rods to Nepal.

Indian export offers fall $50-70/t w-o-w

• Fresh offers of IF-route billets were reported at around $580/t exw eastern India, equivalent to $605/t CPT Nepal. Offers fell by $70/t w-o-w.
  
  
• Wire rod export offers also plunged $70/t, w-o-w, and fresh offers for commercial grade (produced through the IF route) stood at around $650/t exw eastern India, equivalent to $675/t CPT Nepal.
  
  
• Sponge iron, comprising a mix of 70% lump and 30% fines (FeM 80%), export offers dropped around $50/t, w-o-w, with fresh offers at $400-410/t exw eastern India, equivalent to $430/t CPT Nepal. About 1,000 t of deals were reported this week as against on average 5,000 t every week.
  
  

The primary mills in India are holding fresh offers amidst poor enquiries. The market still awaits clarity on whether or not deals concluded prior to the government's announcement of 15% export duty on steel products would come under the purview of the new tariff.

Outlook

Is it expected that fresh export deals to Nepal are likely to remain limited due to the changes in duty structure and Nepal's upcoming annual budget.