As Chinese hot rolled coil (HRC) prices have taken a sharp downturn, non-Chinese suppliers have responded by lowering their prices to the Gulf Cooperation Council (GCC) region. This price reduction follows a significant drop in the Chinese stock market and a weakening of the Chinese yuan against the US dollar. Consequently, Chinese steel futures saw a weekly drop of $10 per tonne for HRC. Non-Chinese suppliers have adjusted their offers, reducing prices by $15-25 per tonne from end-December levels.

For instance, tier-one Chinese mills have set their benchmark prices for 3mm+ HRC (Q195, A36) at $500-505 per tonne cfr GCC, equivalent to about $465-470 per tonne fob China. Prices for firm bids can be reduced by $5-10 per tonne. One trader offered Chinese tier-one material at $490 per tonne, suggesting the possibility of short selling for March shipments. Meanwhile, HRC offers from an Indian major for 2mm SAE 1006 grade HRC for late-February to early-March shipment are at $535 per tonne, down from $550-560 per tonne at the end of December. A Taiwanese major also lowered its price for similar products, offering them at $535 per tonne for early March shipments, compared to the previous price of $555 per tonne.

Japanese mills have followed a similar pattern, lowering their March shipment prices from $530 per tonne to $520-525 per tonne. Additionally, Chinese tier-one mills have set the price for 1.2mm SPHT-1 grade steel from their ESP line at around $555 per tonne for February shipments.

These price reductions are primarily based on cfr Dammam, Saudi Arabia, or Jebel Ali, United Arab Emirates. Despite these adjustments, most buyers in the region are adopting a “wait and see” approach. However, with the Chinese New Year holiday approaching, it is expected that more inquiries will be made towards the end of this week and next, potentially leading to deals. Buyers are aiming to secure March shipments before the holiday, anticipating better rates once the Chinese market reopens after the break.