Posted on 26 Jun 2024
Buyers of hot rolled coil in the Gulf Cooperation Council are seeing prices slide steadily week by week, driven by Chinese suppliers, in the absence of Indian mills’ offers.
Following changes to EU quota regulations, which limit supply per country, the Middle East market is expected to see fierce competition between Chinese and non-Chinese suppliers. With the number of oil and gas, water transportation, mega and mid-size projects taking place, and increased offshore drilling activity, HRC demand in the region will remain robust in the coming years, Kallanish analyses.
Ahead of the Eid holiday earlier this month, the bloc's re-rollers booked a combined 20,000 tonnes from a Far East major for 2mm SAE100 grade HRC at close to $570/tonne for August load readiness. Meanwhile, tube makers in the United Arab Emirates and Oman, via trading companies, booked base (3mm S235JR) HRC from the Chinese tier-one mill at $555-560/t for end-July/August shipment, with the lower end representing volumes in excess of 20,000t.
A tube maker's enquiry translated into a deal for 15,000t of multiple thicknesses, of which S235JR grade makes up a large portion, together with some S275JR, at average effective $561-563/t for end-July loading.
Last week, a tube maker booked nearly 10,000t of various grades and thicknesses HRC from the Chinese top-tier mill – largest, benchmark producer – for base 3mm S235JR at $552/t for early-August shipment.
This week, however, ex-China tier one prices are almost $5-10/t lower than last week, at $545-550/t for base material, while 1.2mm SPHT-1 grade is at $600-603/t for end-July/early-August loading. On the other hand, ex-China 0.36mm+ cold rolled full hard is at $595/t, with a negotiable margin for early-August shipment.
The Japanese major has informed its customers in the bloc it will undertake a maintenance shutdown in September. Its initial price for 2mm SPHC grade is at $575/t, with no allocations left for the GCC market for late-August shipment.
All prices are based on cfr Dammam, Jebel Ali or Sohar.
"Due to the change in quota restrictions in the EU, non-Chinese suppliers in the Far East are expected to step up their efforts in the region and alternative markets as they are hungry for orders," comments a trading source.
Source:Kallanish
