Indian hot-rolled coil (HRC) exports to the Middle East witnessed a slight decline this week, with offers hovering around $620-625/t CFR, against previous week’s $625-630/t CFR amid recent deal concluded. Moreover, an Indian major has booked 20,000 tonnes (t) of HRCs at $625/t CFR UAE last week for March 2024 shipment, informed a reliable source.
In addition, Chinese prices are competitive, current offers from China to the ME remained range-bound w-o-w to $590-595/t CFR UAE from tier 1 mills, while tier 2 mills are offering around $580-590/t CFR UAE.
Factors influencing drop in imported HRC prices:
1. Chinese SHFE HRC prices fall w-o-w: China’s Shanghai Futures Exchange (SHFE) dropped due to low domestic demand, also resulted decline in Chinese export offers. SHFE futures are showing mixed trends post-Chinese New Year (CNY) holidays. SHFE HRC futures on 5 March 2024 remained range-bound on d-o-d basis at RMB 3,874/t ($538/t). However, the same fell by RMB 27/t ($4/t) against RMB 3,901/t ($543/t) a week ago.
2. Demand, market conditions: Steel import prices in the United Arab Emirates and Saudi Arabia are declining due to sluggish demand. Residential projects in Kuwait are driving steel sales, while industrial projects remain scarce. However, the quantity of steel sales has increased in calendar year 2023 (CY23), but with lower profits. Furthermore, new government is positive but the National Assembly dissolved due to some cryptic statement, sources based in Middle East (ME) informed.
Outlook:
Middle Eastern HRC market is uncertain in future. While Chinese export offers remain stable, a decline in SHFE futures and lower demand throughout the region could lead to further price drops. There are some positive signs, with an Indian mill booking a recent sale and some steel sales increase despite lower profits. However, political instability and a lack of large industrial projects could slowdown any significant price rebounds.