Nepal's rebar prices under pressure, billet import offers volatile

Domestic rebar prices in Nepal fell further by NPR 1,000/t ($9/t) this week while raw material (billets) import offers remained volatile as in the beginning of week, billet import offers were trending down but rebounded towards the closing of the week with an improvement in Indian domestic demand.

A few deals of Indian IF-route billet exports to Nepal were recorded this week, while primary mills remained away from floating offers amidst prevailing bullish trends in Nepal.

Current rebar offers for 10-20 mm from the mid-sized plants are at around NPR 79,000/tonne (t) ($671/t), while those from the major mills producing premium brands are at around NPR 81,000-82,000/t ($688-697/t). Prices are on 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 $565/t, which was hovering at $555/t exw Durgapur in the beginning of the week. Demand for IF-route billets remained firm and roughly 2,000-3,000 t deals were confirmed this week at around $552-555/t exw-Durgapur, equivalent to $580-585/t CPT Nepal.

Meanwhile, wire rod export offers floated by mid-sized mills were reported at around $605-610/t exw, equivalent to $635/t CPT Nepal, down by $5-10/t, w-o-w.

Indian sponge iron mills conclude deals to Nepal

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 $415/t loaded on to rake, eastern India, equivalent to $440/t CPT Nepal.

It is expected that Indian sponge iron exports to Nepal may gain momentum in the coming months with an increase in the country's melting capacity and the recent commencement of production by a couple of plants.

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

The prevailing sluggishness in Nepal market is less likely to support finished steel prices. However, if Indian export prices rally, Nepal's mills will be left with no option but to raise prices to recover higher input costs.