In the United Arab Emirates market, Indian suppliers have reacted to lower Chinese hot rolled coil prices and issued final offers at $875-880/tonne cfr UAE for 2mm and up SAE 1006 re-rolling grade HRC.

Indian mills are notifying buyers that prices are negotiable, which gives the latter hope prices will fall further. Buyers are thus currently refraining from giving firm bids, Kallanish notes.

It has been learnt that Saudi Arabia-based Hadeed has concluded deals in UAE for pipe-making grade S235 HRC at $890/t cpt and re-rolling grade 2mm and up SAE 1006 HRC at $900/t for January delivery.

Chinese initial offers at $880/t cfr are also being circulated; however, long lead times prevent re-rollers placing orders. All re-rollers in UAE and Saudi Arabia have sufficient stock to carry out operations until end-March 2022.

Sole Saudi HRC producer Hadeed is fully booked for January shipments and is preparing to announce February-delivery prices, the latest by the beginning of next week. It is anticipated to lower HRC prices, in line with falling iron ore values, as well as the global ferrous price downtrend.

An Indian mill is heard to have given an initial offer for re-rolling grade HRC at $850/t cfr Dammam for January delivery. However, the buyer is hesitant to place a firm bid since it expects further price falls.

“A Japanese major mill who has good reputation in Saudi Arabia is prepared to take a position against the softened Indian and Chinese HRC prices,” comments a sector participant. “If their HRC price for re-rolling grade will level at $900-910/t cfr for end-January and February delivery, that will not be workable since buyers are ready to pay a maximum $7-10/t premium [over Indian and Chinese material], not more than that.”

The Japanese mill is capable of producing narrower than 700mm width, which gives it an advantage versus rivals. Taiwan-based CSC is capable of producing the same size.

In Egypt, HRC export prices are reported to have dropped for re-rolling grade to $910-920/t fob for end-January delivery. Last week, this price was $980/t fob. The country's sole HRC producer, Ezz Steel, is heard revising its prices and not offering this week.

"Ezz holds a big advantage in the Saudi market due to its proximity and for producing thinner-than-1.5mm HRC, but it does not benefit from this. It makes spot sales and is not consistent and sustainable in the Saudi market,” comments a trader.