Following the end-of-Ramadan holiday, Emirati buyers have resumed negotiations with foreign suppliers of hot rolled coil (HRC) for new contracts. However, buying activity has been to some extent constrained by the divergence between offers and bids.
Accordingly, following successful sales of HRC at $1,060-1,080/mt CFR to the UAE before the Eid holiday, India-based suppliers have started testing the market with HRC offers at $1,115-1,130/mt CFR, for August shipment. However, at the current stage customers have become more cautious towards new purchases due to the recent appearance of signs of a downtrend in HRC futures and local prices in China. “There are no deals as of now, but active talks are continuing,” one India-based HRC supplier commented with regard to the current developments in the Emirati market. As of May 19, HRC futures at the Shanghai Futures Exchange are standing at RMB 5,678/mt ($883/mt), decreasing by RMB 1005/mt ($157/mt) or 15 percent over the past week. “Once the news of a softening comes, everyone chooses to wait further,” a foreign HRC supplier stated. There are market insiders with quite a different view though. “We strongly feel the market will go up due to less availability. Moreover, not all regions are accepting Chinese HRC, which gives additional confidence that prices have not reached their top,” the UAE-based re-roller stated.
SteelOrbis has learned of a fresh booking of 600 mt of ex-India cold rolled coil (CRC) to the UAE at $1,225/mt CFR, for August shipment. Meanwhile, one Emirati customer booked 15,000 mt of ex-China CRC of re-rolling grade for making hot dip galvanized coil (HDG) at $975/mt CFR Dubai, for July shipment. Overall, ex-China CRC is available at $995-1,015/mt CFR, according to market insiders.
Meanwhile, offers for ex-India 1 mm Z275 HDG coils for August shipment have been heard at $1,350-1,360/mt CFR, while the most recent offers for HDG of the same specification produced by local mill United Iron & Steel for shipment in the same month have been voiced at $1,320-1,340/mt ex-works, SteelOrbis has learned.