Nepalese mills are actively booking Indian sponge iron, while fresh orders for billets remain limited.
About 25,000 t (10-12 rakes) of sponge iron was booked from eastern India to Nepal this week, including lump-based DRI (C-DRI) and pellet-based DRI (P-DRI).
Current offers for C-DRI are at $465-470/t LTW eastern India, equivalent to $485-490/t CPT Nepal (FeM 80%, lumps 70%, fines 30%). Prices are more or less stable, as per SteelMint’s assessment.
Billets
However, despite firm BF-route billet export offers, the mills are holding fresh bookings as they have placed sizeable orders earlier and the dispatches are going on. Offers were reported at around $625/t LTW-eastern India, equivalent to $640/t CPT Nepal.
Also, demand for IF-route billets remained limited due to contstant surge in offers. Fresh offers for IF-route billets stood at around $625/t exw-Durgapur, equivalent to $650/t CPT Nepal. These offers rose by $15/t, w-o-w, as per SteelMint assessment.
Similarly, demand for Indian wire rods remained poor as the Nepalese mills opted for Indonesian wire rod, which is cheaper by roughly $140/t against the landed cost from India.
Nepalese mills booked around 20,000 t of BF-route wire rods from Indonesia recently at around $655-670/t CFR Haldia port (India) basis, equivalent to $700-710/t CPT Nepal, for September shipments. BF-route wire rod offers from India are hovering around $835-840/t CPT Raxaul border (including 15% export duty).
Domestic rebar offers drop further
Domestic rebar offers in Nepal dropped again by NPR 1,000/t ($8/t) w-o-w. Current offers for 12mm rebar are at around NPR 92,000/t ($725/t) on ex-works basis, excluding VAT.
Demand for finished steel products remained dull in Nepal due to liquidity crisis on account of rising interest on borrowing loans.
Also, monetary policy has reduced the margin rate on land as a collateral to up to 30% inside the Kathmandu Valley from 50% earlier.
The Nepal Rastra Bank (NRB) has adopted measures to reduce the aggregate demand, which is considered one of the main factors trigerring consumer price inflation. For this purpose, the central bank has attempted to reduce money supply largely.
On the other hand, the rise in interest rates is likely to trigger a cost-push inflation, making investments expensive for the private sector and goods will get costlier than before.
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