Nepal: Rebar prices decline w-o-w as weak construction demand outweighs stable raw material costs

• Year-end liquidity constraints and monsoon disrupt construction activity
• Wire rod offers soften in line with weaker regional steel demand

Nepal’s rebar market remained under pressure during the week, with trade prices declining by NPR 1,000/t week-on-week to NPR 75,000/t ($506/t) for cash transactions. Bank guarantee deals were reported at NPR 77,000-79,000/t ($519-532/t), as weak construction activity and cautious procurement continued to weigh on market sentiment across the country.

Demand remained the principal driver behind the correction. Construction activity slowed further due to the ongoing monsoon season and the fiscal year-end, reducing project execution and limiting fresh steel consumption. Market participants also highlighted delayed government payments to construction companies, which tightened liquidity and discouraged inventory replenishment. Consequently, most buyers restricted purchases to immediate requirements.

On the supply side, raw material trends offered mixed signals. Billet prices remained stable at $424/t CNF Raxaul, providing cost stability for re-rolling mills. However, sponge iron prices declined by $2-4/t CPT Raxaul, easing input costs and reducing upward pressure on finished steel prices. The softer sponge iron market, combined with adequate material availability, enabled suppliers to maintain competitive offers despite lower margins.

Regional market conditions also reflected subdued demand. IF-EAF wire rod offers softened to around $510/t CNF Raxaul, indicating weaker buying interest across neighbouring markets and reinforcing the cautious tone in Nepal’s long steel segment. Limited trading activity across the border further curtailed any meaningful price support for domestic rebar.

Looking ahead, market participants expect construction activity to recover after the monsoon season, particularly once pending government payments are released and infrastructure projects resume. Until then, rebar prices are expected to remain under pressure, with demand conditions continuing to outweigh relatively stable raw material fundamentals.