Billet buyers from Gulf Cooperation Council (GCC) countries have been sharing negative expectations regarding the future price trend due to growing market uncertainties and weakening domestic demand for longs, in the UAE and Saudi Arabia in particular.
UAE-based buyers may be limited to only local billet sources for now, taking into account restricted logistics. According to market sources, Omani producers are limited in their deliveries to the UAE as the border is currently closed. Local UAE-based Arabian Gulf Steel Industries is offering $420/mt ex-works with no fresh deals reported. Emirates Steel Industries, according to sources, is taking its time to announce fresh offers. Buyers, however, are aiming at $400/mt CPT at the highest in the new round, taking into account subdued demand for rebar in the country. The latest offers for billet ex-India have been at $395-405/mt CFR, depending on the supply channel.
According to local producers, the latest workable level for rebar is at AED 1,760-1,770/mt CPT at sight, corresponding to $480/mt CPT on average. Moreover, in the new announcement a $15/mt drop is anticipated, SteelOrbis understands.
In Saudi Arabia, domestic offers from the induction furnace-based producers are at $470/mt CPT this week, but they are expected to drop by at least $10-15/mt shortly. In the import segment, only one buyer is reportedly considering offers, but intends to wait for now as the market trend is down. Earlier this week, some indications were voiced at above $400/mt CFR, but the customer’s target is certainly not above $380/mt CFR. It is worth mentioning that within the coming weeks other buyers will be receiving cargoes, booked earlier from Turkey and the CIS, at around $420-425/mt CFR, as SteelOrbis reported.