Flats market players have overestimated demand in Saudi Arabia looking at the situation in rebar segment. Despite the fact that long products are in short supply, demand for sheets and coils is moderate, though higher than in other countries of the region. Currently, insiders consider the demand even weak since end-users have become overcautious. This is explained by a rapid fall in stockist prices which were initially too high. Besides, strengthened downward trend worldwide has contributed to the decrease. In particular, stockist prices for import HRC 1.2 mm thick have lost $110-125/t in two weeks.
If traders manage to keep the prices from falling further, their position will be quite satisfactory: even in view of increased prices for domestic material (+$55-65/t since April 13) they won’t be at a loss. There may be some trouble with import products since some suppliers set the prices by $30-50/t higher than average stockist quotations.
Market participants expect the market leader Hadeed will not suffer either. The producer is now selling July production (most of the output has been reportedly booked out) and buyers have fully accepted its upward correction made on April 13. Traders suppose buyer activity will surge in late July – early August, so they expect August production of the mill will be in strong demand if prices in the world market do not change much.
In particular, mills’ prices for flats from Hadeed are as follows ($/t, exw): 2 mm HRC – 750-755, 1 mm CRC – 880, 1 mm HDG coils with 120 g/sq.m coating – 1,000, 0.33 mm pre-painted flats – 1,190.
For reference, prices for HRC and HDG have risen by $55-65/t compared to late March, those for CRC – by $60/t, and prices for pre-painted products have stayed unchanged.
In the stockist market 2 mm HRC from Hadeed are quoted at about $850/t, 1.2 mm import HRC – $890-950/t ex-warehouse.
Demand for import material, except for 1.2 mm HRC, is extremely low. However, traders are willing that import offers of these HRC will fall too and so they are reluctant to make deals now. They think it is reasonable to buy this material at no higher than $820-830/t c&f Dammam, in line with two-week-ago transaction prices for Thai products. Nevertheless, only Egyptian 1.2 mm HRC are now being imported at $900-920/t c&f Jeddah (+$85-100/t in a month). Besides, market sources report Egyptian producer is ready to grant discounts.