Rebar prices in Nepal dropped by NPR 3,000/t ($25) w-o-w on moderate demand and decline in steel prices in India.
In order to save higher input costs, Nepal’s re-rollers are largely procuring billets from the domestic market rather than India.
On average, the landed cost of domestic billets in Nepal is cheaper by $40-50/t compared with the landed cost of Indian induction furnace (IF) billets.
Current offers for Indian IF billets are hovering around $775/t CPT Nepal ($750/t exw Durgapur), equivalent to $830-835/t DAP (delivered to plants in Nepal) inclusive of freight, import as well as domestic duties. Domestic billets prices in Nepal are reported at NPR 95,000-95,500/t exw ($780-785/t).
This has resulted in limited buying of Indian billets from Nepal, with only a few parcels heard sold (a total of around 2,000 t) over the last couple of days at around $745/t on exw Durgapur basis.
Domestic rebar offers
Offers for 10-20mm rebar in Nepal were heard at around NPR 107,000/t ($880/t), down NPR 3,000/t ($25/t) w-o-w. Prices are on ex-works basis, excluding VAT.
Sponge iron demand remains active
Sources informed SteelMint that the major players who have their own billet production facilities in Nepal are booking sponge iron aggressively. They are largely selling billets due to better margins because of moderate demand for rebar along with lower margins (conversion).
About four-five rakes of Indian sponge iron bookings were reported this week at around $520-530/t loaded on to wagon (eastern India), equivalent to $545-550/t CPT Nepal (FeM 80%, lumps 70%, fines 30%). These offers dropped by $50/t, w-o-w, due to the fall in Indian domestic prices.
Outlook
Due to the holidays in India and Nepal, finished steel demand is expected to remain sluggish, which may result in softening of offers in the near term.
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