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Ministry of Commerce And Supplies - Enhanced Integrated ...

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N T I S2010Types <strong>of</strong> Exported Products: The main items <strong>of</strong> export include (a) cold rolled steel sheets; (b) galvanizedcolour-coated steel sheets; (c) black galvanized steel pipes; (d) black galvanized wires; (e) steel structures: preengineeredbuildings, transmission and telecom towers, steel bridges, etc.; (f) telescopic and tubular poles forpower and telecom sectors; and (g) bicycle rims.Current Export Destinations: According to <strong>of</strong>ficial trade data from importing countries, practically all exportgoes to India, with negligible export to Bhutan, Egypt, and Japan. According to information directly obtainedfrom exporters, Bhutan is an important market for Nepalese steel products and some export has also beenmade to other countries, e.g. Tanzania.On average 10 per cent <strong>of</strong> the total production <strong>of</strong> higher value added products like GI and pre-coated sheetsare being regularly exported and mainly to neighbouring markets in India and Bhutan. One <strong>of</strong> the surveyedcompanies exports almost 75 per cent <strong>of</strong> the total sheet production to Indian and Bhutanese markets andother companies export similar shares <strong>of</strong> their wire production. Recently, Bhutan Power Corporation hasgiven an order for electrical poles to the tune <strong>of</strong> 15,000 MT.Potential Export Destinations: Respondents see some potential in African markets.Dynamism <strong>of</strong> Exports: Exports have grown fast in recent years and have almost tripled since 2004. However,one reason for that is certainly the increasing cost <strong>of</strong> raw materials.Index 2: World Market ConditionsTable 2.35Total World Export Value <strong>of</strong> Iron and Steel Products(HS chapters 72+73)2004 2005 2006 2007 2008393,527,488 456,050,992 539,355,488 682,594,896 826,689,312Source: TradeMap.World Market Prospect: The world market for iron and steel products has been very dynamic, but this alsoreflects the increased prices in raw materials. Average unit values for export <strong>of</strong> iron ore have quadrupledbetween 2003 and 2008 and have increased further since. Additional increases can be expected from theupcoming change <strong>of</strong> the contract system that was announced in March 2010. But these developments do notdirectly affect the Nepalese steel industry because Nepal is not ‘selling’ steel but only processing steel. Whatis more relevant for Nepal is the demand for steel products from its potential export markets, in particularIndia. India’s demand for steel products has been very dynamic in recent years and, with a forecasted annualgrowth <strong>of</strong> construction in the next few years, this will certainly remain so.Market access conditions: Nepal would enjoy no preferential access in almost all markets when comparedto the tariffs faced by major competitors. The only exception is India. India applies a 5-10 per cent duty onimports <strong>of</strong> iron and steel products, but provides free access to Nepal.Index 3: Domestic Supply ConditionsProducers: There are around 50 plants in operation and around ten <strong>of</strong> them are currently exporting. Most<strong>of</strong> the production is, however, for the domestic market. Some <strong>of</strong> the firms operate under joint venture withIndian companies.74NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT

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