Steel mills in Nepal are under pressure on prevailing dull demand, even though the festive season has come to an end. With the approaching general elections in the country, market participants are cautious and assuming that steel offtake would likely remain slow in the coming term.
As per SteelMint’s weekly assessment, domestic rebar (12mm) prices in Nepal have declined by NPR 2,000-3,000/t and are currently hovering around NPR 85,000/t ($658) exw and excluding VAT.
Amidst sizeable inventories, a majority of steel mills are running at 50% capacity, sources based in Kathmandu said.
Weak demand affects raw material purchase
There are hardly any bulk deals reported from India’s sponge iron and billet manufacturers as mills in Nepal, with sufficient stocks, and are waiting for demand recovery as well as a clear outlook on prices before resuming bulk purchases.
A few small deals of Indian IF-origin steel billets were reported at around $540/t exw-eastern India, equivalent to $565-570/t CPT Nepal, via road delivery.
Meanwhile, no fresh deals of finished steel were reported from India due to healthy export duties and the mills in Nepal are largely procuring wire rods from Indonesia, with current offers reported at around $560/t, and for BF route billets at $520-525/t CFR Haldia for Nepal.
Sponge iron
The demand for Indian sponge iron exports remains weak on account of absence of orders from Nepal.
SteelMint’s weekly export price assessment for Nepal remained stable at $410/t LTW from eastern India, equivalent to $430/t CPT Nepal for FeM 80% (lumps 70%, fines 30%) material.
Outlook
The steel demand outlook in Nepal is expected to remained sluggish due to liquidity crunch amid the general elections in the country on 20 November.
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