Non-Indian-origin import offers are preventing hot rolled coil price hikes in the Gulf Cooperation Council market. Numerous buyers with very low inventories booked modest tonnages last week of tubemaking and re-rolling grade HRC from Chinese, Saudi and Indian mills.
In November, re-rollers have seen improving demand from their customers abroad and their sales registered a 25-40% growth on October. This week, imported HRC prices are unchanged from last week, Kallanish notes.
In United Arab Emirates last week, after a long period of absence from the market, the major Indian mill issued its offer. It concluded a deal for a small cargo of mismatched-size HRC at $605/tonne cfr UAE for 5mm thickness S275JR grade for December shipment. The mill is offering 2mm+ re-rolling grade (SAE 1006) at around $640/t cfr GCC for December shipment, which buyers find unworkable. Other suppliers’ offers are at $585-605/t cfr for January shipment.
In UAE and Saudi Arabia, a few tubemakers booked from a Chinese mill at $620-625/t cfr GCC ports for 1.2mm thickness SPHT-1 grade for January shipment. A re-roller in UAE booked 5,000 tonnes from a GCC mill for 2mm+ SAE 1006 grade at $620/t delivered to Abu Dhabi for late-December shipment.
This week's prices are the same as last week; a Japanese HRC supplier, not typically active in the bloc, is offering base grade HRC at $580/t cfr GCC for February shipment. The bloc's well-known major Japanese supplier's negotiable initial offer for 2mm+ SAE 1006 grade is meanwhile at $600/t cfr for January shipment. Buyers say the latter has a $10-20/t margin for compromise subject to tonnage and customer classification.
Re-rolling grade HRC offers from Taiwan and the South Korean mill's Indonesian subsidiary are at $585/t cfr GCC for January shipment. Meanwhile, a Russian mill's officials, while visiting potential UAE customers, are indicating $15/t lower than market price for their material. However, buyers are showing less interest due to sanctions imposed on the Russian steelmaker's largest shareholder.
An ex-China 0.34-1.17mm cold rolled full hard (CRFH) offer was heard at around $620/t, while South Korean 0.4-2mm thickness material is at $640/t, both cfr Abu Dhabi with January and February shipment, respectively.
Meanwhile, Vietnam-based Formosa's SAE 1006 and S235JR grade HRC offers through a Hong Kong-based trading company are at around $580-585/t cfr GCC ports for January shipment. S275JR grade incurs $10/t extra.
Well-known Indian HRC suppliers to the region are quoting at $600-610/t cfr GCC ports for mid-January shipment for tubemaking and re-rolling grades.
"We know the Formosa quality through our contacts in India, and their re-rolling grade HRC is exceptionally good,” a senior downstream mill official comments. "The price increase that happened two weeks ago is not sustainable; for this reason, next week we expect $600/t cfr GCC will be the threshold for higher margins."
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