core sector communique

Middle East steel market awaits Gods own hand to up the ante

 

Fatalism seems to be the only recourse for the Middle East market which has come to terminal point without any revival in sight. The orgy which started in April refuses to die in the Gulf. The never say die depression has become characteristic of this market although it has shown gradual let up in other quarters of the globe.

In this quagmire each holiday or even slightest of inconsistency kindles hope which soon peters out. Likewise Ramadan was believed to be the harbinger of auspicious omens expected to beckon revival in the market. Operators where fishing out variety of factors for this turnaround starting from stock depletion to hiked scrap prices.

With the culmination of Ramadan on 10th September market waited with baited breath for the baptism. A fortnight down the road it seems to be a mere apparition.

The market is taking nationalistic hue with local centric sourcing. The obvious reasons being at par parity with imports levels, shorter lead time as demand remains feeble and need based. As a result the speculative color has vanished obliterating even remote possibility of revival. It is learnt that rebar prices have taken a dip by AED 50 per tonne during last week after mills forced a hike of AED 100 per tonne just after Ramadan. The rebar offers from Turkey at USD 590 per tonne CNF seems to be nightmare for re-rollers when billet is being offered at USD 580 per tonne CNF.

HRC market seems slightly better with pipe demand trickling from USA which has diverted its appetite to Gulf after initiating anti dumping proceedings against China. Import offers have been heard at USD 665 per tonne CNF Dubai but without any transactions. Market expectation is around USD 630 per tonne to USD 640 per tonne still unmatched by mills.

For plates, some of the Indian mills have become aggressive through their stockyards with offers at AED 2550 per tonne ex stockyard 120 days credit which is about AED 200 cheaper than the local mills leaving them aghast. The last import offers were heard at USD 680 per tonne to USD 685 per tonne CNF Dubai with bookings done about USD 10 per tonne less.

Overall the pall of gloom is writ large. Moreover with international long product prices having taken a dip by USD 30 per tonne to USD 40 per tonne in the last fortnight and mills valiantly trying to defend as the rug is being pulled with dwindling order books there seems miniscule probability of revival.

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