Nepal: Sluggish trend, liquidity crunch weigh on rebar demand
Domestic rebar offers in Nepal were stable w-o-w despite weak demand. The mills maintained prices at the same levels on account of high raw material procurement prices, S...
Domestic rebar offers in Nepal were stable w-o-w despite weak demand. The mills maintained prices at the same levels on account of high raw material procurement prices, SteelMint notes. Moreover, weak demand has also forced standalone re-rollers to postpone major bookings for billets.
Why is demand subdued?
- Ongoing sluggish trends in global markets have kept buyers away, compelling them to book steel as per necessity. Thus, bulk orders for rebar remained limited.
- Industry sources informed that there is liquidity crisis as market participants are not getting funds for the government projects on time. This is slowing down the progress of projects.
- Nepal's domestic offers for rebar manufactured by the standalone mid-sized rolling mills for 10-20 mm currently stand at NPR 81,000-82,000/tonne (t) ($675-683/t). However, the plants which have CCMs (own billet plants) are selling depending on quantity and payment terms, sources informed.
Billets demand limited
- Nepal mills remained less interested in procuring billets in bulk volumes. However, a few small parcels were sold recently (via road delivery) at around $550-555/t exw-Durgapur, equivalent to $575-580/t CPT Nepal. While the fresh offers stood at $540-545/t exw Durgapur, down by $10/t, w-o-w.
- Also, demand for blast furnace (BF)-route billets remained weak as after a gap of one month, only a deal was concluded for a rake at around $625-630/t as against around $665-670/t, CPT Nepal concluded in Oct-end.
- Offers for mid-scale mills' wire rods dropped by $15/t against the previous week and are hovering at $595-600/t exw-Durgapur, equivalent to $620-625/t CPT Nepal.
Aggressive bookings for sponge iron
- SteelMint confirmed over 5,000 t of sponge iron export deals this week to Nepal, in which the latest deal for a mix of 70% lumps and 30% fines was closed at around $415/t, exw-eastern India, equivalent to $440/t CPT Nepal.
- Indian sponge iron export demand is likely to remain strong as a few more plants are in the process of starting billets production, taking advantage of the recent duty revisions, sources informed.