With a constant fall in domestic rebar prices in Nepal, demand for Indian billets and wires has subsequently decreased since the last couple of weeks. As a result, no fresh deals via rake delivery have been heard.
Seasonally weak demand as well as the closing of the financial year weighed on steel prices and demand in Nepal, SteelMint notes.
Domestic rebar prices in Nepal dropped further by NPR 3,000/tonne(t) ($25/t), w-o-w. However, in this period, billet import offers remained more or less the same amidst volatility in Indian domestic steel prices.
Fresh rebar offers of 10-16 mm floated by mid-sized plants are reported at NPR 75,000-76,000/t ($629-637/t), while those from the major mills producing premium brands are at around NPR 77,000-78,000/t ($645-654/t). Prices are on an ex-works basis, excluding VAT and ED.
Steel production drops
The steel mills which were operating at over 50% capacity, have now reduced their utilisation to 30-35%. Few mills have even halted operations to ease selling pressure building on them.
If sources are to be believed, the major mills are currently having nearly two months of finished steel stocks, which are up two-fold against the average of less than one month’ pile-up earlier.
Billet import offers stable
As per SteelMint’s assessment, induction furnace (IF)-grade billet import offers in to Nepal remained stable against the previous week. Currently, the same are stands at $535-540/t exw-eastern India, equivalent to $560-565/t, CPT Nepal, via road delivery. Sources informed about a few bids at around $530/t exw. However, no fresh deals have been reported by the primary mills which produce steel through the blast furnace route.
Outlook
There are expectations that domestic steel prices in Nepal may move down further in the coming days. This may also put pressure on steel prices in eastern India as a large portion of secondary mills’ wire rods and billets production is exported to Nepal.
Nepal’s billets imports from India were recorded at 6,92,000 t in CY’21 (till Jun’21) as against 9,20,000 t in CY’20 (Jan-Dec’20).
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