Nepal’s Domestic Steel Demand Grows post Elections

Local steel demand in Nepal has improved considerably with conclusion of the legislative elections. Producer and other market participants in Nepal reported to SteelMint that the local steel prices have surged by almost Nepalese Rupee (NPR) 3,000/MT (INR 1,800, USD 28), post elections.

Currently, the domestic Rebar prices for commercial grade are reported at NPR 66,000-67,000/MT (INR 41,200-41,900, USD 640-650) which was around NPR 63,000-64,000 MT (INR 39,300-40,000, USD 612-624) during election period i.e. end of November to first fortnight of December, 2017. The prices are ex-Birgunj (Nepal), size 10-20mm & excluding VAT @ 13%.

According to producers another major reason behind soaring steel prices in Nepal is the rise of Indian billet prices which increased by almost INR 1,500-2,000/MT (USD 23-30) during the same time.

It should be noted that, Nepal has failed to develop healthy billet making facilities owing to severe power crisis, rendering the country dependent on Indian for billet supply. Steel prices in Nepal directly correspond with those observed in India.

According to Nepal Customs data, India is the sole supplier of billet and sponge iron import to Nepal.

In 2017 till mid November, 1,005,000 MT billet were imported by Nepal while Sponge imports stood at 143,000 MT. Meanwhile, in 2016 (Jan-Dec) billet and sponge imports stood at 1,109,000 MT and 66,150 MT, respectively.

The latest induction grade billet export offers to Nepal are hovering at USD 460-465/MT ex-mill, Durgapur, USD 450-455/MT ex-mill, Rourkela and USD 500-505/MT on ICD, Nepal port basis. However, fresh deals yet are to be conclude and the last trade was reported at around USD 457-458/MT (ex-mill) by Durgapur based manufacturers.

Nepal has about 20-25 rolling mills which produces around 0.8-1.0 million tonnes of finished steel annually.

Nepal Billet & Sponge Import (Qty in MT)

Source: Nepal Customs, SteelMint