Middle East: Imported HRC prices remain stable w-o-w in absence of trade

Chinese HRC (grades S235 and S275) export offers to the Middle East (ME) remained stable this week amid lack of trade activity. Offers are hovering around $580-585/t CFR UAE. Moreover, HRC offers from Japan to the ME remained unchanged at $580-590/t CFR UAE, due to sluggish domestic demand.

Shanghai Futures Exchange (SHFE) HRC futures remained range-bound d-o-d at RMB 3,887/t ($536/t) on 28 May 2024. However, prices moved up by RMB 23/t ($3/t) w-o-w against RMB 3,864/t ($533/t) on 21 May.

Indian mills continue to hold exports offers to the ME due to limited export allocations and higher domestic realisation.

"The Middle East (ME) is experiencing sluggish domestic demand, likely due to volatile steel prices. When steel prices stabilise, demand is expected to return to normal levels," said a source. Moreover, the supply and demand is currently balanced with production meeting consumption needs, this could be due to steady ongoing projects. The UAE's crude steel production in April declined by 8.3% y-o-y to 4.6 million tonnes (mnt).

The outlook for HRC exports to the Middle East face remains uncertain. While prices may hold steady for now, a potential rise in demand could push them further upwards. On the other hand, limited supply from India might also drive prices up. Additionally, the recent passing away of Iran's President adds to the region's geopolitical uncertainty, which could disrupt pricing.