Nepal's rebar prices stable, billet import offers volatile

Domestic rebar prices in Nepal were stable this week, while raw material (billets) import offers remained volatile. Since the beginning of the week, billet import offers were trending down but rebounded towards the close of the week with an improvement in Indian domestic demand.

A few export deals of Indian IF-route billets to Nepal were recorded this week, while a few participants claimed that discussions are on to amend the recently imposed domestic taxes on steel products, especially in imported billets. This may improve billets demand soon, they indicated.

Current rebar offers for 10-20 mm from the mid-sized plants are at around NPR 79,000/tonne (t) ($670/t), while those from the major mills producing premium brands are at around NPR 82,000-83,000/t ($695-704/t). Prices are on an ex-works basis and excluding VAT.

Indian IF-billets prices volatile

As per SteelMint's assessment, fresh export offers for Indian IF-route billets to Nepal are being floated at around $570/t, which were hovering at $560-565/t exw Durgapur, equivalent to $590/t CPT Nepal, at the beginning of the week. Demand for IF-route billets is low currently, compared to the amendment in taxes in the recently-announced budget.

Meanwhile, wire rod export offers floated by mid-sized mills were reported at around $610-615/t exw, equivalent to $640/t CPT Nepal, more or less firm on a w-o-w basis.

Sponge iron demand active

SteelMint confirmed about two rakes of sponge iron (FeM 80%, mix of lumps/fines 70:30) export deals this week to Nepal at an average price of $435/t loaded on to rake, eastern India, equivalent to $460/t CPT Nepal.

Sources said, sponge iron demand will remain strong as melting capacities in Nepal are spurting with furnaces commissioning production.

Nepal's sponge iron imports from India were recorded at 144,350 t in Jan-Aug'21, as against 111,600 in Jan-Aug'20, up by 29.3%. Meanwhile, the country's billet imports from India in Jan-Aug'21 rose to 878,100 t compared to 570,850 t in the corresponding period last year, up 54%.

Outlook

Trade participants are hopeful that steel prices and demand are likely to remain bearish in Nepal due to the upcoming festive holidays. To fulfil the demand post-the festive season, the mills may be aggressive in booking raw materials from India in the coming days, SteelMint notes.