Middle East: Imported HRC market turns quiet amid Ramadan onset

The imported HRC market in the Middle East (ME) turned quiet this week with buyers opting for a 'wait-and-watch' approach amid the ongoing Ramadan season. Chinese HRC offers continued to remain competitive. The current offers from China to the ME are at $590-600/t CFR UAE from tier-1 mills, while tier-2 mills' offers are hovering around $570-580/t CFR UAE. Offers have come down by $10/t w-o-w.

On the other hand, Indian hot-rolled coil (HRC) exports to the ME remained stable for the week, with offers ranging at $620-625/t CFR, informed a source. Moreover, no deals have been heard.

Factors influencing imported HRC prices

1. Chinese SHFE HRC prices fall w-o-w: China's Shanghai Futures Exchange (SHFE) prices fell due to weak domestic demand and a fall in raw material prices. SHFE futures contracts are showing inconsistent trends following the Chinese New Year (CNY) holidays. SHFE HRC futures on 12 March 2024 edged down by RMB 13/t ($2/t) d-o-d to RMB 3,785/t ($528/t). Moreover, the same fell by RMB 89/t ($12/t) against RMB 3,874/t ($540/t) a week ago.

2. Low demand: Steel prices are dropping in the UAE and Saudi Arabia on low demand. Customers are holding off on purchases, possibly anticipating lower prices during the Ramadan season, which typically slows down trade. Additionally, the market is waiting for new steel offers from India.

Outlook:

Indian HRC exports prospects to the Middle East are uncertain at this juncture. Weak demand in the ME due to the ongoing Ramadan month could lead to a decline in Indian HRC exports in the near future. This suggests Indian exporters may need to adjust their pricing or find other ways to attract buyers in the coming weeks.