Nepal's domestic rebar prices plummet on sluggish demand, falling Indian steel prices

Nepal's domestic rebar prices plunged by NPR 4,000/t ($32/t) w-o-w due to sluggish domestic demand and softening Indian steel prices, which fell by INR 1,500-2,000/t ($20-26/t), w-o-w.

Domestic finished steel demand in Nepal remains slow due to the ongoing liquidity crisis and upcoming annual budget, which will be presented next week.

Meanwhile, after a price correction w-o-w, fresh offers of 12mm rebars stood at NPR 103,000/t ($829/t) on an ex-works basis, excluding VAT.

Nepal's mills actively booking raw materials

Despite price corrections in domestic finished steel products in Nepal, the mills are actively booking raw material, i.e., sponge iron and billets, from India. This is due to the hope of no major price corrections with mid-sized plants ahead of the monsoon, which generally tightens supply of sponge iron and othe base raw materials.

• About 12,000t of IF-route billet deals were recorded this week at a price range of $650-660/t exw eastern India, equivalent to $675-685/t CPT Nepal. These offers fell by $25/t w-o-w.
  
  
• In addition, about 10,000 t of sponge iron deals were recorded this week after a pause of a few weeks and the average price of mentioned deals was reported at around $450-460/t exw eastern India, equivalent to $470-480/t CPT Nepal, considering mix of 70% lumps & 30% fines, FeM 80%. These offers fell by $20/t w-o-w.
  
  
• However, demand with primary mills remained sluggish due to bid-offer disparities and the indicative price of BF-route billets was assessed at $730/t, and for wire rods, at nearly 820/t CPT Nepal. Amidst competitive offers of mid-sized mills, demand with primary mills remained weak, SteelMint notes.
  
  

Outlook

Indian IF-route export demand for billets and sponge iron is likely to remain strong from Nepal ahead of the monsoon, as mills have to stock material.