Nepal's raw material imports halt on dull steel demand ahead of festive holidays

Nepal's raw material bookings from India and Indonesia have came to a halt as the domestic industries are unable to sell their finished steel products ahead of the approaching festive holidays in the country along with placed healthy orders in last couple of months. The domestic market will remain closed next week, as per Kathmandu-based sources.

Domestic rebar

Domestic rebar (12mm) prices have remained under pressure and are currently hovering around NPR 89,000/t ($687) exw, excluding VAT.

Sales of finished steel products remain slow in the country and mills sources stated that inventories have risen nearly two-folds amid poor offtake of material.

Imports from Indonesia

About 50% of wire rod, billet imports are being delivered by Indonesia, while the remaining will be dispatched by the end of October. These orders were placed during the July-Aug'22.

Current offers for Indonesian BF-origin billet were reported at around $565-570/t CFR Haldia, equivalent to $610/t CPT Nepal.

Meanwhile, Indian suppliers are offering BF billet at around $625-630/t CPT Nepal. However, no deals were reported in September due to competitive offers and healthy bookings from Indonesia in July-August.

Sponge iron

Moreover, no fresh deal was reported for sponge iron due to placed healthy orders during the first half of September. With no fresh deal and falling prices in the Indian domestic market, SteelMint's weekly price assessment fell by $5/t w-o-w to around $450/t CPT Nepal for FeM 80% (lumps 70%, fines 30%) material.

Outlook

The festive season is likely to put further pressure on Nepal's domestic steel prices, which is likely to impact fresh orders for imports.