The Middle East steel market witnessed a complete phase of inactivity last week as buyers stayed away from buying even at lower levels anticipating further crash in price levels.
Price levels have buckled after the debacle in Europe and meltdown in Chinese domestic levels. However the peculiarity of this region is that there are no takers even at low levels as the demand is absent.
Hot rolled coil offers from China have fallen to USD 590 per tonne to USD 610 per tonne CFR UAE, down from last week’s USD 620 per tonne to USD 680 per tonne CFR. A big booking from a Chinese stockiest was made at as low as USD 545 per tonne CFR. HDG from China is at USD 710 per tonne to USD 880 per tonne CFR, down from USD 800 per tonne to USD 840 per tonne CFR, UAE sources say the wide range of prices is because of low priced spot sales in the country.
It is reported that the prices for steel products from CIS in Middle East keep falling in recent weeks. Actually, they have returned to the early March level. In particular, semis with the delivery in June are offered at USD 470 per tonne to USD 490 per ton FOB, wire rod and rebar prices fell to USD 530 per tonne to USD 540 per ton FOB. The Ilyich Steel Works of Mariupol keep decreasing the prices and offers HRC at USD 560 per tonne FOB and less. Other Ukrainian and Russian mills offer similar products at USD 620 per tonne to USD 665 per ton FOB. However offers from CIS have made them virtually out of market due to abysmally low Chinese offers and better price realization in Europe despite the crisis.
The situation in long product prices is even worse. The Turkish levels have been plummeting despite attempts by the mills to force increase.
The MEA steel market is pessimistic about demand and the general economic downturn in Europe makes a pick-up in the Middle East region less likely. The producers see more bookings to come, when the market is convinced that the bottom is reached, and they say the prices has already bottomed or very close to the bottom.
The Ramadan factor has already come in play as bookings made in June will arrive end July just when before the holidays. However a lot will depend on the turn of events in Europe and China epicenter of baby recession.