The Gulf Cooperation Council hot rolled coil market is sluggish, with obtaining firm bids being the biggest challenge for sellers.

HRC prices dropped under the $1,000/tonne cfr GCC psychological threshold before the Eid holiday and have now reached a second threshold, $900/t cfr, which is expected to be breached in the coming days. Suppliers are enthusiastic about receiving bids, but buyers prefer a wait-and-see policy, with prices falling continuously, Kallanish observes.

At the beginning of this week, 2mm+ SAE 1006 grade HRC initial offers from Indian mills were heard at $910-920/t cfr for June shipment, but mills were ready to compromise at $900/t cfr. After a long absence, South Korean offers for the same material are heard at $940/t cfr and Japanese at $950/t cfr GCC. However, for firm bids, buyers expect Japanese and Korean mills would agree to conclude at $900-910/t cfr for end-June/early-July shipment. 

Chinese end-June-shipment offers for 3mm+ SS400 grade HRC at $850/t and cold rolled full hard (CRFH) at $880/t, both cfr GCC, are making buyers wonder whether Chinese material price tags may fall further. However, due to Covid-19-related lockdowns, which are causing congestion in ports, buyers are concerned about material not arriving on time. So far, no delays have been reported by sector participants.

"We are optimistic that we will see $800 price offers within a short time. In the past two months, we placed orders to Chinese mills, and we haven't experienced any delays so far,” says a senior rolling mill official.

"Business activity should continue. HRC prices pegging at between $800/t and $900/t cfr GCC are the consumer level and industry can digest it,” opines a senior pipemaker official.

A Chinese tier-one mill's 1.2mm thickness SPHT-1 grade HRC offer has been heard at $950/t cfr Dammam, whereas the same grade material of 2mm+ thickness is offered at $895/t cfr UAE.

"There is a wide range of HRC prices available, but for firm bids, the price ceiling is set at $900-910/t cfr GCC for non-Chinese material,” opines a senior mill official. "In the coming days, if buyers continue to refrain from giving firm bids, prices will drop below $900/t cfr.”

The Saudi Arabia-based, sole GCC HRC producer has released its July-rolling prices, with 3mm+ SAE 1006 grade HRC quoted at $1,020/t delivered within Saudi. However, this price has been found unworkable, and it is anticipated that Hadeed will compromise at $950-960/t delivered for firm bids.