Middle East: Imported HRC offers drop ahead of Eid holidays

Imported hot rolled coil (HRC) offers to the Middle East (ME) fell due to the observance of the Eid-al-Adha festival over 16-18 June 2024. The period, as usual, was marked by the absence of market participants. Meanwhile, Chinese mills reduced their export offers as limited deals were reported. There were no offers from Japanese mills. Their Indian counterparts continued to hold back their HRC export offers to the region.

China's HRC (grades S235 and S275) export offers to the Middle East fell by $5/tonne (t) w-o-w to $560-565/t CFR UAE against $565-570/t last week. Moreover, some tube makers booked shipments for July and August. A deal of around 15,000 t was heard concluded at similar price levels for end July-end August 2024 shipments, while another deal of approximately 30,000 t was heard at $565-567/t levels for July shipments.

Shanghai Futures Exchange (SHFE) HRC futures edged up by RMB 19/t ($3/t) d-o-d to RMB 3,802/t ($524/t) against RMB 3,783/t ($521/t) on 18 June 2024. Moreover, on w-o-w basis, the same increased by RMB 26/t ($4/t) as compared to RMB 3,776/t ($520/t) a week ago.

No fresh offers were heard from Japan. The last heard HRC offers from Japan to ME were at $570-575/t CFR UAE on 11 June 2024.

Indian mills are not currently exporting to the Middle East, due to the absence of attractive offers. "Indian mills' offers are so high, it seems they are still not willing to accept the reality," said an ME-based source.

Outlook

The Middle East HRC import market is expected to see a cautious return to activity following the Eid al-Adha holidays. The upward trend in China's SHFE HRC futures suggests a potential price increase for Chinese HRC exports to the region.