Posted on 15 Jan 2025
Hot rolled coil buyers in the Gulf Cooperation Council are observing some Chinese mills attempting to raise their prices by eliminating discounts that they were willing to offer just last week.
However, the top-tier Chinese mill has lowered its quotes by $10-15/tonne on-week to $530/t. It has indicated a potential further decrease of $10/t before the Chinese New Year holiday.
Buyers are confused by the contradictory signals, with the lack of demand in China and globally unlikely to support any price increases, Kallanish notes.
Towards the end of last week, an enquiry from an Omani pipemaker for 10,000 tonnes resulted in a deal through a trading house with a tier-one Chinese supplier at $485/t average effective for March shipment.
This week, initial offers for ex-China tier-one base (S235JR/SS400) HRC are priced at $500-510/t for March shipment, with a few options available for February loading. 2mm SAE 1006 grade is priced at $515-525/t for March dispatch and 1.2mm SPHT-1 grade is offered at $555/t for February shipment from the ESP line of the supplier.
In addition, 2mm SAE grade is available from the Japanese major at $520/t for loading in late March or early April, while the Indian major has adjusted to $525-530/t, from $530-535/t a week earlier, for loading in late February/early March. The Indian major's price drop was linked to local currency depreciation, and weak domestic and export market sentiment, particularly in Europe.
This week, two separate inquiries have been released by re-rollers. The largest re-roller is targeting at and below $500/t for a15,000t parcel loaded in the first half of March, with delivery in early April. Due to short lead times, the Indian supplier appears to have an advantage, even if its prices are $5-10/t higher than other suppliers.
All prices are based on cfr terms to Sohar, Oman; Dammam, Saudi Arabia; or Jebel Ali/Abu Dhabi, United Arab Emirates ports. Prices can vary from the above by $5/t depending on port discharge rates, as it is well known that the port of Dammam has for a long time experienced congestion, with western Saudi buyers preferring to discharge at Dammam despite it being on the east coast, due to Red Sea crossing risks.
Source:Kallanish
