Nepal’s Ferrous Products Imports Grow 4.9%: Steel Industry Outlook 2025

Nepal’s imports of ferrous products obtained by direct reduction of iron (sponge iron) increased by 4.9% in the first month of 2025/26, reaching Rs. 3.91 billion compared to Rs. 3.72 billion in the same period last year. With a 2.7% share of total imports, ferrous products remain a critical input for Nepal’s steel and construction industries, which are central to infrastructure development.

Analysts say the growth reflects steady demand from construction, real estate, and infrastructure projects, despite broader economic challenges. Roads, bridges, hydropower plants, and urban housing projects continue to require sponge iron and semi-processed steel as raw materials for local rolling mills and steel plants. Moreover, rising urbanization and reconstruction efforts after natural disasters have kept steel consumption stable.

However, experts also note that the pace of growth is modest compared to other commodities. Importers face challenges from volatile global iron ore and steel prices, high transportation costs, and liquidity constraints in Nepal’s banking system. At the same time, competition from cheaper imports of finished steel products has created pressure on domestic steel producers, who rely on sponge iron imports as their main raw material.

Looking ahead, the outlook for Nepal’s steel industry in 2025 is cautiously optimistic. Demand is expected to remain stable due to ongoing hydropower and road projects, but rising costs and trade imbalances could weaken competitiveness. Policymakers stress the need to support domestic steel manufacturing capacity to reduce reliance on imports and stabilize prices in the long run.