Posted on 23 Nov 2022
With minor exceptions, almost all hot rolled coil buyers in the Gulf Cooperation Council have very low inventories. They are expected to release their enquiries this week, and a large tonnage of bookings is expected to be concluded next week.
Buyers are eyeing January-shipment material, aiming for minimum stocks at year-end so that they register good cash flow. India’s export duty annulment has come as a relief to tubemaker and re-roller buyers since their customers in the EU and USA do not want material made from boron-added HRC, Kallanish notes.
Indian, Taiwanese, Chinese, Japanese and Saudi mills have given their price indications for January shipments to downstream facilities, which are observing improving demand in Europe and the USA. An unsolicited ex-Vietnam 2mm+ thick, 1,000mm+ wide SAE 1006 grade HRC offer was made at $565/tonne cfr GCC through a trader not known in the market. 1.8mm thickness incurs a $10/t extra charge.
"Buyers have tremendously low inventories. But they are not taking the first step because of the most recent price hike of $20-25/t on the previous week. Further pushing may break the rope. For this reason, mills [sellers] prefer to wait to receive the enquiries to start a negotiation," comments a sell-side source.
For re-rolling grade (SAE 1006), Indian, Taiwanese and Japanese price indications are heard at $590-605/t cfr GCC. In contrast, Saudi material is in the same price range on a delivered basis to Oman or United Arab Emirates for January shipment. Chinese and South Korean pipemaking SS400 grade HRC offers are heard at $570/t and $580/t, respectively, both cfr GCC.
Buyers are yet to digest the price hike and are pushing to conclude deals for re-rolling grade HRC at $580/t cfr GCC for January shipment.
It has also been heard that ex-China 1.2mm SPHT-1 grade HRC is offered at $625/t cfr Jeddah, while 2,000mm wide, 2mm thickness A36 grade is at $590/t cfr Dammam for January shipment.
"The sentiment is better, and our sales are picking up. New enquiries are coming from Europe, but buyers do not accept a price increase. It [the market] needs at least a week or two to adopt the new prices,” observes a buy-side source.
The region's sole HRC producer, in Saudi Arabia, is expected to announce its February-rolling HRC price by next week.
Source:Kallanish
