The Gulf Cooperation Council's sole hot rolled coil producer, a major Saudi steel company, has reduced its 3mm SPHC base grade prices by $20 per tonne compared to August. The new price for September rolling is set at $680 per tonne delivered nationwide.
The decline in prices comes as the GCC region continues to rely on imports for its flat steel needs. The absence of Indian mill supply has left the market dependent on other sources. Far Eastern major Nippon Steel, for instance, has no allocation for the region for September loading due to a planned maintenance shutdown at one of its mills. Nippon Steel's margins are also better in other export destinations.
Despite the price cuts, import volumes remain flat, indicating weak demand in the region. The GCC countries have been struggling with overcapacity issues and limited export opportunities to shift excess capacity. Trade data shows that imports of selected steel products into the region have generally fallen from a peak in 2015, with some exceptions like the UAE's cold-rolled coil imports.
The weak regional market has led to the start of exports from GCC mills, with some deals concluded in Southeast Asia and China. However, GCC mills typically seek large markets where they can sell large cargoes of at least 30,000 tonnes, limiting their options.
As the GCC steel industry navigates these challenges, the need for diversification, improving competitiveness, and finding new export markets will be crucial for its future growth and sustainability.