Chinese, Japanese and Korean seem to have turned the apple cart for domestic majors in Middle East. Edging past their Black Sea rivals they are bagging bulk of the import orders in HRC and Plates.

Ducking under the barrage of HRC offers in the range of USD 540-560 per tonne CFR, Arabian Gulf Hadeed has hastily revised domestic offer levels to USD 620-630 per tonne from level of USD 700 per tonne earlier. CIS offers at USD 580 per tonne were not able to cut ice.

Mobarakeh’s last tender for HRC, in August was concluded at USD 550 per ton FOB, about USD 570 per ton CFR UAE port. Since Mobarakeh’s tender settlement price is taken as bench marker in this region Chinese and CIS mills would certainly like to better it. Moreover with Chinese offer levels dropping as low as USD 530-540 per tonne, CFR bottom is yet to be reached.

Plates from China were sold at levels around USD 570 per ton, while CIS price levels were still around USD 600 per ton CFR Arabian gulf.

Coming days will be challenging both for the buyers and sellers with Chinese domestic market surging after the economic stimulus. In the likelihood of the higher levels sticking on there might be an uptick in offer levels. At the same time buyers would like to satiate their greed by postponing purchase till the market bottoms out. Dilemma is likely to be over in a fortnight with clarity of trend emerging in both regions.

Source - Strategic Research Institute

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