Nepal's Local Steel Prices Stable Amid Volatility in Indian Billet Market

Amidst heavy volatility in Indian billet market, major rebar producer in Nepal have refrained from executing major deals thus leading to stability in rebar prices. In addition, demand for rebar in Nepal also remains balanced.

As per SteelMint weekly assessment, commercial grade Rebar offers are currently at NPR 70,000/MT (INR 43,900/MT or USD 690/MT), which was at 70,000-71,000/MT (INR 43900-44600, USD 690-700) during last week. The prices are ex-Birgunj (Nepal), size 10-20mm & excluding VAT @ 13%.

The standalone billet producers in Durgapur, East India also confirmed that no fresh bulk billet export deals to Nepal have been executed, however small deals are in progress. Recently, a deal for induction grade and size 100*100 mm have been concluded at USD 503-505/MT ex-mill. Wire rod export offers being assessed by Durgapur based mills are at USD 600-605/MT (ex-mill) for commercial grade and size 5.5-6.0 mm.

A Rourkela, Odisha based manufacturer also stated that a billet export deal to Nepal is under negation and is expected to take place at around USD 500/MT ex-mill.

Nepal produces around 1.0 million tonnes of finished steel for which the nation requires more than 1.0 MnT Ingot/billets annually.

As per the customs data, the country has imported about 1.08 MnT billet from India in calender year 2017 (Jan-Dec mid) as compared to 1.04 MnT in 2016 (Jan-Dec mid). Meanwhile, Sponge iron imports are assessed at 148,177 MT in CY 2017 against 66,150 MT in 2016.

Indian Billet Prices Remain Volatile

With the beginning of 2018, Indian billet prices are highly volatile due to two major factors, one is closure of few major mines in Odisha and second is fluctuating local steel demand.

The current billet prices for Induction grade are hovering at INR 31,800-32,000/MT ex-Rourkela, INR 32,300-32,500/MT ex-Durgapur (East India), INR 32,800-33,000/MT ex-Raipur (Central India), INR 34,500/MT ex-Chennai (South region) & INR 34,800-35,000/MT ex-Ahmedabad/Mumbai, Western India. The prices are ex-mill & excluding 18% GST.

Indian billet prices may remain volatile as local demand is remains supported. However, major exporters are inactive due to strong realization in domestic trade. Also, according to trade participants, when the prices rise sharply, trade volume declines significantly in turn pull down prices.