Sentiment weakens in the UAE’s HRC market

Trading activity in the UAE hot rolled coil (HRC) market has remained slow owing to Ramadan. However, some foreign suppliers have increased their offers.

Indian mills, supported by the surge in demand in other destinations, have raised HRC prices to the UAE as well. Currently, ex-India HRC is available at $415/mt CFR, up $10-15/mt over the past two weeks. However, the suppliers are pretty skeptical regarding the sustainability of the uptrend. “Indian mills aim to increase prices, but it will hardly yield results in the Middle East in view of Ramadan, when demand is very, very weak here,” a supplier stated. “Let’s see if it [price increase] works taking into account that Korean and Japanese materials are cheaper,” the representative of another mill commented.

South Korean HRC offers to the UAE for June shipment have not changed since the end of April and are voiced at $400/mt CFR, with sporadic deals for small lots done. According to sources, Japanese mills are at the same level in offers to the UAE. In addition, ex-Ukraine small coils are available at $400/mt CFR.

According to sources, the recovery of the HRC sector in the UAE is unlikely to happen in the near future. “We do not expect any positive changes even after the end of Ramadan as usually happens. It might take at least six months to revive due to the unprecedented developments caused by Covid-19,” a UAE-based source told SteelOrbis.