Hot rolled coil suppliers are holding back offers to the Gulf Cooperation Council market and waiting for Chinese quotes to be floated after the Lunar New Year holiday. Most sector participants expect Chinese HRC prices to hike, which is very common after this holiday, Kallanish notes.

A major Japanese mill concluded deals last week for 3mm base grade (SPHC) at $690/tonne cfr GCC ports for March shipment. Some remaining allocation for March shipment is expected to be sold before 10 February. April-shipment prices are expected to be higher than the current initial quote at $700/t cfr GCC.

A re-roller floated an enquiry for 25,000 tonnes of SAE 1006, 1008 and 1021 grade HRC of multiple thicknesses. No offers are heard to have been submitted, Kallanish learns from market sources.

Amid supportive domestic demand, one of the three tier-one Indian mills is heard offering S235jr grade HRC at $720/t cfr GCC ports for early-March shipment. South Korean and Taiwanese mills stopped offering to adopt a wait-and-see policy, being confident of a price rise. Indian mills are observing low demand in the European market and will release March-shipment quotes in the first week of February. These quotes are expected to level at and above $725-730/t cfr GCC ports.

"The scenario has changed from a buyer's market to a seller's market,” opines a buy-side source. "Suppliers are offering to their selected customers only."

The region's sole HRC producer, the Saudi mill, has sold out for March, closed sales, and is preparing to announce April-rolling prices next week. Buyers expect at least a $20/t increase on their March-rolling quotes for base grade at $740/t for 3mm thickness, $747/t for 2.3mm and $760/t for 2mm, all delivered within Saudi Arabia.

Last week, an ex-Egypt SPHT-1 grade 2mm HRC offer was heard at $710-715/t fob for March rolling, incurring $40/t extra for 1.2mm thickness; however, the producer has now withdrawn its offer and will return in February.

"Chinese crude steel production in 2022 was roughly 50 million tonnes lower than in 2021 due to the low [Chinese] domestic demand amid Covid restrictions. Chinese mills' current average utilisation rate is 86-88%, and after the Lunar New Year, we expect strong domestic demand in China,” explains a sell-side source.

"Chinese export markets such as Turkiye have a strong appetite, and in the aftermath of the new year holiday, we expect a price hike in HRC quotes. They try this price increase every year in China. Unlike last year, Chinese mills have a low allocation for March rolling this year, but it is noteworthy saying that traders have position cargoes,” he adds.