Middle East inquiries pick up as steel mills push longer lead times amid freight uncertainty

Middle East buyers have begun re-entering the hot-rolled coil market with fresh inquiries, prompting Asian mills to discuss longer lead times for cargoes amid ongoing freight volatility and routing uncertainties.

Regional market participants said inquiry volumes from Middle Eastern buyers have improved in recent days, although deals remain difficult to conclude.

"Some customers from Saudi Arabia have come out to buy, and some vessel owners have already quoted freight," a China-based mill source said, pointing to renewed but cautious buying interest.

In response, mills are increasingly structuring offers with longer lead times to address vessel availability constraints and potential shipment delays.

A mainstream mill source said a small booking of less than 5,000 mt destined for the Middle East was concluded during the week at $483/mt FOB Bayuquan for June shipment.

"There are still negotiations [underway] but with the longer delivery time to the Middle East, we're hoping to wait out for the situation to get better," the source said.

The mill was said to be offering at $500/mt FOB Bayuquan, but its tradeable levels hovered at $485/mt FOB.

Market participants said it remains difficult to execute deals to the Middle East as elevated freight rates and disruptions to shipping routes continue to complicate negotiations.

A China-based trader said shipments originally scheduled for Dubai have encountered difficulties, with some cargoes being redirected to alternative destinations such as Oman or India.

The shift in destination has also introduced additional complexity in pricing discussions, particularly around how freight costs are shared between buyers and sellers.

"As cargoes are being redirected, buyers and sellers now need to negotiate how to share the additional freight costs incurred," the trader said.

Freight costs have risen by around $10/mt compared with pre-war levels. Shipping rates from the Middle East have increased from about $30/mt to above $40/mt, according to the trader.

Meanwhile, Oman's Sohar port -- located outside the Strait of Hormuz and increasingly used as an alternative hub -- has seen congestion rise due to an influx of redirected shipments, further reinforcing the need for longer lead times.

Platts assessed SS400 HRC of 3-mm thickness at $476/mt FOB China on March 19, unchanged on the day. The same grade was assessed at $511/mt CFR Southeast Asia, up $1/mt over the same period.