Middle East: Imported HRC market quiet, offers drop
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- Ramadan keeps trades subdued
- SHFE HRC futures fall by $8/t
Chinese hot-rolled coil (HRC) export offers to the Middle East (ME) declined this week by $15-20/tonne (t) w-o-w with current ones hovering at $550-560/t CFR UAE against $570-575/t CFR in the previous week. However, no deals have been heard.
On the other hand, Indian HRC exports to the Middle East remained stable w-o-w at $610/t CFR, informed a source. Moreover, no deal was concluded owing to price competitiveness from Chinese mills.
Factors influencing imported HRC prices
Low market demand: Steel imports into the UAE and Saudi Arabia were sluggish this week. This slowdown is due to the traditional dip in business activity during the holy month of Ramadan and recent price drops in the steel market.
SHFE HRC futures fall w-o-w: The Shanghai Futures Exchange (SHFE) in China saw prices decline. This drop was caused by weak demand for materials within China itself. SHFE HRC futures fell by RMB 54/t ($8/t) w-o-w to RMB 3,743/t ($518/t) on 27 March 2024 against RMB 3,797/t ($526/t) on 20 March 2024. Furthermore, the same fell by RMB 39/t ($5/t) d-o-d against RMB 3,782/t ($523/t) on 26 March 2024.
Outlook: The outlook for Indian HRC exports to the Middle East is unclear. With the holy month of Ramadan currently underway, demand in the region is weak, which could lead to a decrease in Indian HRC exports in the near future. The situation is further complicated by the declining Chinese futures market, with the possibility of an even steeper drop coinciding with the upcoming Eid festival in April. Notably, crude steel production in the Middle East rose by 17% y-o-y to 8.9 million tonnes (mnt) during January-February, 2024, as per data released by worldsteel (WSA).
