Non-Chinese hot rolled coil suppliers have reduced their offer prices to the Gulf Cooperation Council in response to a slump in Chinese prices. This comes after a drastic fall on Chinese stock markets and a depreciation of the local currency against the dollar.
As a result, Chinese steel futures have experienced an on-week decline of $10/tonne for hot rolled coil.
Non-Chinese suppliers have nevertheless reduced their prices to the GCC by $15-25/t on end-December offers, Kallanish notes.
Chinese tier-one mills have set their base (Q195, A36) prices for 3mm+ HRC at $500-505/t cfr GCC, which equates to around $465-470/t fob China, with a $5-10/t reduction applicable against firm bids. One trader's offer for Chinese tier-one material was heard at $490/t, suggesting potential short selling for March shipments.
Meanwhile, 2mm SAE 1006 grade HRC from an Indian major was reported at $535/t for late-February to early-March load readiness, down from $550-560/t at end-December. A Taiwanese major offered the same grade at $535/t for early March, down from $555/t, while tier-one Chinese mills quoted prices at $515-520/t for March shipments.
Japanese mills also offered similar prices, at $520-525/t, for March shipments, down from $530/t. Additionally, 1.2mm SPHT-1 grade from a tier-one Chinese mill's ESP line is pegged at around $555/t for February shipments.
Unless otherwise stated, all prices are based on cfr Dammam, Saudi Arabia, or Jebel Ali, United Arab Emirates.
Most buyers are currently adopting a "wait and see" approach. Various inquiries are expected to be submitted towards the end of this week and next week, which could lead to deals, as buyers are aiming to secure March-shipment cargoes before the Chinese New Year holiday, anticipating better rates.
“The market is quiet but all buyers after the New Year holiday are cautiously monitoring the market and next week we expect many deals to be committed as many believe [now is the] best time [to make deals] before the Chinese New Year officially starts on 29 January, for which many [Chinese suppliers] will go offline three to five days earlier," comments a trading side source.