Posted on 19 Jul 2023
Hot rolled coil buyers in the Gulf Cooperation Council are receiving offers from limited origins. Almost all traders have turned their supply chain to China, while Indian and Japanese majors are out of the market.
Last week, the Saudi mill bagged a large-quantity contract with United Arab Emirates-based mills. Last Thursday, Chinese HRC mills tried to increase their quotes even before previous offers lost validity, but buy-side sources found alternatives, notes Kallanish.
Last week in the bloc, a 20,000-tonne parcel of ex-Saudi 2-3.5mm thick re-rolling grade (SAE 1006) HRC was booked at an average price close to $610/tonne delivered to UAE for September shipment. Through a trading company, 16,000t of ex-China silicon controlled (maximum 0.03%) SS400 grade HRC, of which 70% is at and above 3mm and the remainder at 1.85-3mm thickness, was committed at $483/t cfr Sohar, for September shipment.
In Saudi Arabia, a Chinese tier-one mill's combined tonnage of 15,000-18,000t of 1.2mm SPHT-1 grade material was booked by one buyer for its two separate facilities at $605/t cfr Dammam and $610-613/t cfr Jeddah. This is for August shipment. The initial offer was at $615/t cfr Dammam, but was elevated this week to $620/t cfr Dammam for August shipment, with limited allocation.
This week, on a cfr GCC ports basis, September-shipment Chinese prime-brand 2-3mm thick SAE 1006 grade is offered at $606/t and Taiwanese at around $600/t. An Indian major, which was out of the GCC market, surfaced its August-shipment price offer for tube-making HRC at around $650/t for small quantities only. A Japanese major is expected to raise its October-rolling quotes sometime next week.
“Buyers are not in a rush, and they [the buyers] know Chinese domestic and global HRC demand is weak. Each time Chinese material quotes are pushed up, buyers hold back and prices return to their previous level or lower," explains a senior trading company official. "If Chinese tier-one mills do not seriously go into production cuts, supply will exceed demand and the price rebound will not happen."
Source:Kallanish
