Japanese steel suppliers deal with the Gulf Cooperation Council HRC market

In a recent development within the Gulf Cooperation Council (GCC), Japanese steel suppliers are making significant strides in securing deals, with a noticeable impact on the HRC market dynamics. The increased competition between Japanese and Chinese suppliers has sent ripples through the industry.

Japanese HRC suppliers, JFE, had opened allocations for shipments starting in late November. However, despite offering an attractive price below $585/t CFR GCC ports, JFE faced challenges due to its mid-December shipment timeline.
This prompted Chinese mills to up their quotes by $10/tonne on a week-to-week basis, following a visit by the JFE delegation to the region.

In response, another Japanese HRC suppliers swiftly secured two deals for a total cargo of 22,000 tonnes of high-quality 2mm+ SAE1006 grade steel at prices ranging from $592 to $595/t CFR GCC ports. The terms of the agreements stipulated payment by Letter of Credit (LC) on sight, with the shipments scheduled for late November.

A significant deal was also reached in the pipemaking sector, where a Chinese supplier agreed to provide 7,000 tonnes of silicon-controlled multiple steel with thickness ranging from 2.9mm to 12mm, all of S235JR grade. The transaction was settled at approximately $583 to $585/t CFR Jebel Ali, with the shipment set for the end of October.

In another purchase, a buyer secured a 14,000-tonne parcel of 1.2mm SPHT-1 grade steel ex-China, with prices ranging from $605 to $610/t CFR. The steel would be distributed between the buyer's facilities in Dammam and Jeddah, with the shipment scheduled for the end of October.

Furthermore, the market witnessed an unsolicited offer for 5,000 tonnes of 1.2mm SPHT-1 grade steel ex-China at $610/t CFR Dammam for shipment in October.

Market experts are closely monitoring the situation, especially in light of rising coking coal and iron ore prices, which are exerting pressure on production costs. Chinese HRC suppliers are currently grappling with the challenge of balancing these escalating costs against a backdrop of low domestic demand.

These recent developments in the steel market within the GCC highlight the ever-evolving state of the industry, driven by competition between major Japanese and Chinese suppliers, as well as external factors impacting costs and demand.