Middle East: Imported HRC offers fall w-o-w on slow summer demand

China's HRC (grades S235 and S275) export offers to the Middle East (ME) fell by $5-10/t w-o-w to $525-535/t CFR UAE against $535-540/t CFR UAE. However, no firm deal has been concluded. "There is a general decline in demand and ongoing pressure on prices," a reliable source said.

Shanghai Futures Exchange (SHFE) HRC futures dropped by RMB 34/t ($5/t) d-o-d to RMB 3,357/t ($468/t) as compared to RMB 3,391/t ($473/t) a day ago. Moreover, the same sharply fell by RMB 147/t ($21/t) w-o-w against RMB 3,504/t ($489/t) previous week.

The summer conditions in the ME have resulted in a slowdown of domestic steel demand. Buyers are showing cautious purchasing behaviour, focusing on fulfilling immediate requirements rather than accumulating inventory.

"Indian mills are not selling HRC to the Gulf region due to intense competition from China in the Gulf market", said a ME-based source.

Furthermore, "Indian steel mills will face growing challenges in exporting HRC. This is due to a protective measure implemented by countries affected by steel dumping thereby hindering exports and creating intense competition in the remaining markets, particularly the Gulf region. The presence of Chinese steel producers in these markets will further intensify the difficulties for Indian exporters".

Outlook

The ME market outlook for imported HRCs is expected to remain mixed. Chinese HRC prices are very competitive in the region. However, trade activities have remained limited due to peak summer in the region. In addition, buyers are not actively booking amid ongoing global economic uncertainties and weakening demand.