Hot rolled coil (HRC) imported offers to Middle East (ME) fell post Eid-al-Adha festival holidays. This decline coincides with slow resumption of trade activity as participants return from holidays and adopted a cautious wait-and-see approach. Additionally, steel demand remained moderate as buyers are hesitant to build up stockpiles ahead of the peak summer months of July and August.
Chinese HRC (grades S235 and S275) export offers to ME dropped by $5/tonne (t) w-o-w with offers ranging between $555-560/t CFR UAE as compared to $560-565/t a week ago. Moreover, Chinese mills have booked shipments of around 3,000-4,000 t with a tube maker at similar price levels. Furthermore, an unconfirmed deal of around 10,000 t was heard concluded at $555/t CFR levels for end July shipments.
Shanghai Futures Exchange (SHFE) HRC futures fell by RMB 72/t ($10/t) w-o-w to RMB 3,730/t ($514/t) against RMB 3,802/t ($524/t) a week ago. Moreover, on d-o-d basis the same remained range-bound.
Indian mills have continued to hold HRC export offers due to limited export allocations and higher domestic realisation. The HRC export volumes from India to ME fell by 8,334 t reaching 6,901 t in May against 15,235 in April. Moreover, no fresh offers are heard from Japan.
Outlook
The short-term outlook points towards a cautious market with potentially volatile pricing. The prices might trend down slightly due to the initial weakness from China. However, the limited supply from other sources and potential stabilisation in China could prevent a significant price drop.
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