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Saudi Arabia’s HRC market has slowed, with buyers remaining cautious and import inquiries weakening amid escalating regional tensions and threats to shipping from Yemen’s Houthi movement.
Chinese HRC offers have increased by around USD 5 per ton from previous indications, with 1.2 mm material now heard at USD 630-640 per ton CFR Saudi Arabia and 3 mm material at USD 605-615 per ton CFR.
The GCC’s sole HRC producer, Hadeed, is offering base-size HRC at around USD 740 per ton delivered in Saudi Arabia.
Commercial-quality Chinese heavy plate of 20 mm and above was offered last week at around USD 640-650 per ton CFR Saudi Arabia, compared with USD 635-645 per ton previously.
Market participants report that buying interest has weakened, with uncertainty over shipping, freight costs and delivery schedules discouraging new import commitments.
The Houthi threat has added further risk to the import market. Earlier this year, in July, the group announced a maritime ban targeting Saudi-linked shipping through the Bab el-Mandeb Strait. The security situation has deteriorated further in October, with Houthi attacks targeting Saudi infrastructure, including Riyadh’s King Khalid International Airport and an administrative building at Saudi Aramco’s headquarters in Dhahran, adding to concerns over the wider regional security environment.
The impact of regional tensions continues to be reflected in suppliers’ shipping terms. Chinese steel suppliers are adding clauses stating that if Iran imposes fees on vessels transiting the Strait of Hormuz, or vessels are required to drift or wait because of a closure, additional costs will be shared pro rata among cargoes destined for Persian Gulf ports. The clauses specify drifting charges of USD 0.60-0.70 per revenue ton per day, payable every 15 days, with all additional costs to be borne by the buyer.
The combination of security risks, uncertain vessel availability and potentially higher freight and insurance costs is complicating purchasing decisions. Import inquiries have slowed as buyers take a cautious approach to new cargoes while shipping conditions remain uncertain, according to a GCC-based steel trader.
With Chinese HRC offers still available, the current slowdown appears to reflect buyers’ caution over logistical and security risks rather than a lack of offers, the trader added.