Posted on 21 Dec 2022
The Gulf Cooperation Council hot rolled coil market is observing price improvement amid a lack of HRC allocation from Japanese and South Korean mills for February shipments.
Including Indian mills, major HRC suppliers to the GCC have shifted their focus to Europe to secure better margins. However, an Australian mill, which previously sold two cargoes in the region for October and November delivery respectively, has allocated 25,000-30,000 tonnes of HRC to the GCC market for late-February shipment at $635-640/tonne cfr GCC ports, Kallanish notes.
This week, a major Indian mill raised its offer for SAE 1006 grade HRC for limited allocation for January shipment to $650/t cfr Jebel Ali port, United Arab Emirates, seeking a premium from buyers in urgent need.
February-shipment re-rolling grade HRC offers from Indian and Japanese mills are heard pegging at $640-650/t cfr GCC but buyers are informed prices will increase. A major Indian mill who was earlier absent from the market is offering 2mm S235jr grade HRC at $660/t cfr UAE for February shipment, but this could not attract buyers.
Saudi Arabian tubemakers, accumulated mainly on the west coast of the country, are observing ex-China 1.2mm SPHT-1 grade HRC offers at $670/t cfr Jeddah and $660/t cfr Dammam, for mid-February shipment. Ex-China 2mm base grade offers are at $615-620/t cfr Dammam and UAE ports.
Last week, a re-roller's enquiry for SAE 1006 (majority) and SAE 1008 grades for a 20,000t parcel translated into a deal at an average price of $610-620/t cfr for February shipment. The offers for Chinese, Taiwanese and Indian material were at $620-630/t cfr Abu Dhabi.
"I am doubtful that the price increase will sustain. Despite the rebound in China in the past two weeks which is the main driver of the price hikes, the market is softening in China this week on the back of increasing Covid cases,” comments a senior tubemaker official.
The region's sole HRC producer, the Saudi mill, quoted February-delivery base-grade HRC at $693/t for 3mm thickness, $700/t for 2.3mm and $713/t for 2mm, all delivered within Saudi Arabia. It is expected to receive more enquiries from regional tubemakers and re-rollers after the price gap between imported and local material has narrowed.
Source:Kallanish
