Posted on 08 Feb 2023
The Gulf Cooperation Council hot rolled coil market is seeing sliding prices, particularly of Chinese origin, due to low domestic demand in China. This is compelling sellers to focus on export markets and soften their prices to induce buying interest.
Indian mills are refraining from offering prices to their regular customers in the GCC. This week, HRC prices have decreased by $10-15/tonne on-week, notes Kallanish.
On 29 January, a re-rolling grade (SAE 1006) HRC deal was concluded by a Chinese tier-one mill for 15,000 tonnes at around $712-715/t cfr Dammam, for end-March shipment. A few days later, on 2 February, an Indian tier-one mill concluded a 2mm SAE 1006 grade HRC deal at $740-750/t cfr Abu Dhabi port for March shipment. The Chinese tier-two mill meanwhile concluded a 1.8-6.5mm thickness SS400 grade deal effective at $710/t cfr Sohar, Oman, for mid-April shipment.
An ex-China 0.34-1.17mm cold rolled full hard (CRFH) offer translated into a deal at around $690/t cfr Abu Dhabi for March shipment.
This week, however, amid the absence of Indian and Japanese mills’ offers, Chinese HRC offers were heard at $665/t cfr GCC ports for 3mm SAE 1006 grade from a tier-two mill for mid-April shipment A Taiwanese tier-one mill meanwhile offered at $715/t cfr UAE ports for 2mm+ SAE 1006 grade for end-March shipment.
A galvanised coil deal for ultra-thin gauges of 0.3-0.5mm and 1,220mm width for only 1,200t was concluded at $780/t cfr Abu Dhabi.
Tube markers received offers for 1.2mm SPHT-1 grade HRC at $740/t cfr Dammam from a major Chinese mill (tier-one), whilst ex-Taiwan product is at $760/t cfr Dammam or Jebel Ali ports, both for end-March shipment. A trader with Chinese tier-two mills' positioned cargoes offered 3mm SS400 grade HRC at $660/t cfr UAE ports for March shipment.
"Demand in Europe and China is not supporting the price increase. Another important indication is sea freight rates which came down significantly. When Chinese steel sector participants were back from the New Year holiday last week, they realised that domestic demand in China will not recover in the short term; that's why traders aim to sell their position cargoes and mills at discounted prices,” comments a trader.
“Indian automotive is not supportive either, so the Indian HRC price trend is expected to soften slightly. However, it can't be drastic due to the increasing coking coal and iron ore prices. Soon, the market will turn into a buyer's market from today's seller’s market.”
Source:Kallanish
