Gulf Cooperation Council hot rolled coil buyers have slowed purchases because of softening prices since this week. Buyers are covered until May and are not in a rush to conclude May shipments, Kallanish understands.
The bloc's major tube makers and re-rollers have floated enquiries. However, after noticing prices were falling, they adopted a wait-and-see policy to understand how far the price decline would continue.
This week, two re-rollers in United Arab Emirates have floated enquiries for 15,000 tonnes and 10,000t, respectively. May-shipment offers for 2mm thickness SAE 1006 (re-rolling) grade from a Chinese tier-one mill are at $735/tonne, a Taiwanese major at $735-738/t and Japanese major, for end-May shipment, at $740-745/t. All prices are on a cfr GCC ports basis.
On the other hand, an Indian major is heard offering the same specifications at $745-750/t cfr for late-April/early-May shipment. Indian mills have the advantage of short lead times to the bloc, for which they charge a $10-15/t premium.
Tube makers in UAE received price offers for 1.8mm+ S235JR grade HRC from Chinese mills at around $715-720/t cfr for May shipment. However, traders in UAE with extensive inventories are offering the same grade and thickness, including 5% import duty, at $740/t delivered for prompt shipment, and prices are negotiable. Most HRC buyers in UAE have manufacturing licences and import duty exemptions as they can prove the minimum required 20% of value addition.
"Traders' current stocks are January-delivered material booked in October 2022. Prices were sub $600/t cfr when they were booked. They [traders] have room to go below $700/t delivered,” comments a sell-side source.
A Chinese major's 1.2mm SPHT-1 grade, May-shipment HRC price reduced to $755-760/t from last week's $775-780/t cfr GCC.
Egypt's largest producer is sold out until May after securing good sales and margins in the US, Turkish and European markets, and not quoting for the GCC market. Also, the bloc's sole HRC producer, the Saudi mill, is fully booked for May and expected to issue its June-delivery prices next week.
"The markets are fluctuating and volatile due to the US and Switzerland banking crisis. On top of these, iron ore prices declined in China, which caused uncertainty in the market," comments a sell-side source.
GCC re-rollers have concluded good sales in the first 21 days of the month, particularly in the European and UAE markets.
G40/Z120 1mm hot-dipped galvanised coil prices are prevailing at $980-1,000/t fob UAE or delivered within the UAE.
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Very good overview of the weekly steel market.