- Price increases likely a corrective measure
- Further hikes expected amid power outages
Nepal’s domestic rebar market is experiencing a substantial price surge, with cash guarantee offers ranging from NPR 89,000-91,000/t ($647-661/t) and bank guarantee offers at NPR 91,000-93,000/t ($661-676/t), despite sluggish demand and low trade activity.
“The collective price hike implemented by Nepalese rebar manufacturers aims to establish a break-even point and ensure profitability. This move comes after manufacturers faced sustained losses due to overproduction and low demand, prompting them to set a price floor,” says a reliable source.
Further he adds, “the price increase is a corrective measure to counter previous sales at near-Indian prices, despite relying on imported raw materials. With most manufacturers adhering to the agreement, the price hike is expected to help recover production costs and sustain a minimum business threshold.”
Further price increases are anticipated due to the region’s 12-hour load shedding, which is exacerbating production costs. Additionally, imported sponge iron and steel prices continue to fluctuate.
Imported sponge iron, steel offers
- EAF/IF route wire rod coil (WRC) offers were quoted at $550/t ex-works Durgapur for the week, while BF-route offers stood at $580/t ex-works.
- India’s sponge iron export offers to Nepal rose by $6/t to $354/t CPT Raxaul, up from $348/t the previous week. However, demand and inquiries from Nepal remained weak despite the price hikes.
- In CY’24, India’s sponge iron export volumes to Nepal reached 990,400 tonnes (t), marking a significant increase of 146,712 t compared to 843,688 t in CY’23.
Outlook
Nepal’s rebar market is expected to experience mixed trends in the short term, with fluctuating raw material costs, power outages and weak domestic demand creating challenges for manufacturers. However, government initiatives towards infrastructure development may help stabilise the market and create a more competitive pricing environment.
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