Customers in the UAE have chosen to delay bookings in response to the recent increases in import HRC prices, particularly those from China. This has raised questions about the sustainability of the increased prices as well as the mood of the market. As a result, Emirati buyers have been taking their time amid the ongoing sluggish business activity in the local market.
"Demand in the UAE is not particularly low, but it also cannot be described as extremely high and active, which is why most buyers are currently observing the market developments. However, the fundamental reason for this lack of business activity is that construction projects, particularly in the UAE, have been limited in recent years. Even though there have been several new projects launched in the market, the majority of them are based in Saudi Arabia," the representative of a leading UAE-based re-roller commented to SteelOrbis.
In the meantime, speakers from flat steel companies at the FastMarkets 26th MEIS conference have highlighted that, while the GCC is advantageous for investment in construction, is highly developed technologically, and the availability of materials is great, the reliance on imports adversely impacts the state of the industry.
According to reports, this week's ex-China SS400 offers to the UAE have jumped to $595/mt CFR, up $10-15/mt from the previous week, for January shipments. Market players have reported that ex-China offers for SAE1006 grade have gone up by $10-25/mt to $600-620/mt CFR to UAE.
Although, since the beginning of the month one South Korean supplier has chosen to delay offers to the UAE, according to sources South Korea has sold roughly 5,000-6,000 mt of HRC to the UAE during the past two weeks at $585-595/mt CFR.
"At the moment, we are not offering to the UAE, and as regards the volumes sold before some shipments will be made in December and the rest will be shipped out in January," the representative of a South Korean mill told SteelOrbis.
Additionally, market insiders state that, while the other South Korean supplier has offered HRC to the UAE at prices of $600-605/mt CFR, offers for ex-Japan HRC have been received at $570-580/mt FOB, which equates to around $610/mt CFR to the UAE. However, given the current state of the local market, these prices appear to be very high for Emirati purchasers.