Imported HRC offers in the Middle East (ME) region fell w-o-w due to competitive offers from China and Japan. Indian mills, meanwhile, remain on the sidelines with no export offers to the region. Market participants in the ME are currently restocking ahead of Eid al-Adha holidays in smaller quantities, leading to a cautious buying atmosphere. While a few deals have been concluded with Japan, ME buyers are primarily making inquiries to China, according to market sources.
China’s HRC (grades S235 and S275) export offers to ME dropped by $5/t w-o-w with offers hovering around $565-570/t CFR UAE against $570-575/t CFR UAE a week ago. Prices dropped amid sharp fall in futures. “Chinese mills attempted to raise prices citing increased freight costs but buyers are resistant”, informed an ME-based source. In addition, no firm deals have been heard concluded from China as market participants in China were on Dragon Boat festival holiday on 10 June 2024. While, few tube makers in ME have floated inquiry hinted sources.
Shanghai Futures Exchange (SHFE) HRC futures fell by RMB 52/t ($7/t) d-o-d to RMB 3,776/t ($521/t) against RMB 3,828/t ($528/t) a day ago. Moreover, on w-o-w basis the same edged down by RMB 19/t ($3/t) w-o-w as compared to RMB 3,795/t ($523/t) a week ago.
Japanese HRC offers to ME declined by $10-15/t to $570-575/t CFR UAE against $580-590/t CFR UAE on 29 May 2024. Moreover, a major mill in ME has booked 25,000 tonnes (t) of Japanese HRCs at $570-575/t CFR UAE for August Shipment. Another steel major has also booked 10, 000 t of HRCs at similar price levels.
Indian mills have continued to hold HRC export offers to ME due to higher realisations in the domestic market and competitive prices from other origins like Japan and China.
Outlook
Market sentiments in the ME region is expected to remain mixed with buying activity likely to remain subdued until the Eid holiday passes. Additionally, how Chinese pricing strategies evolve in response to buyer resistance will be important to monitor.