Middle East Steel Market Caught in Price Without Trade Standoff As Hormuz Shipping Disruption Drags On

Dubai/Riyadh/Istanbul - Week of August 4, 2026 - Middle East steel markets remained locked in a holding pattern this week, weighed down by weeks of disrupted shipping through the Strait of Hormuz and the Bab el-Mandeb Strait even as diplomatic signals between Washington and Tehran raised hopes that normal maritime traffic could soon resume. According to the latest Middle East Steel Weekly report compiled by the China-Arab Iron & Steel Association (CAISA) and Mysteel, the region's steel trade is best described by a phrase now circulating widely among traders: "prices exist, but transactions don't."

worldfamousthings

cartoondealer

currentaffairsato

Talk of a possible resumption of U.S.-Iran negotiations has intensified in recent days, but normal shipping order through the Strait of Hormuz and the Bab el-Mandeb Strait has yet to be restored. Most international carriers have still not returned to publishing standard freight quotes for Gulf routes. As a result, import trade into the Middle East remains sluggish: both buyers and sellers are largely sitting on the sidelines, offers for imported steel are scarce, and actual deals are limited. Local mills across the region have generally held their existing price lists steady while they wait for shipping and market conditions to become clearer.

In the UAE, the steel market held broadly stable this week. Suppliers from China, Japan, South Korea and India have scaled back offers, and while inquiries for imported hot-rolled coil (HRC) and medium plate remain active, actual transactions are scarce. Emirates Steel (EMSTEEL) has kept its existing long-products sales policy unchanged, with no new price adjustments announced. Traders in Dubai and Abu Dhabi report that current inventories can still cover short-term demand, and spot prices for construction steel have moved little - though they caution that a prolonged shipping disruption would put renewed upward pressure on import costs.

Saudi Arabia's market continued its steady-to-firm trend. Hadeed (SABIC) has kept its August prices for rebar and other long products unchanged from its earlier announcement, with no further price moves currently planned. Expectations of a thaw in U.S.-Iran tensions have pushed downstream buyers into a wait-and-see posture, holding off on purchases until shipping recovers and import offers are refreshed. With freight timelines and costs for imported raw materials still elevated, mills remain reluctant to lower prices. Market participants broadly expect Saudi steel prices to stay stable in the near term, with the pace of shipping recovery and large-project procurement determining the direction from here.

Turkey's steel market continues to draw support from elevated costs. Imported scrap prices remain firm, largely due to tight European scrap supply and rising freight rates, though mills have slowed their purchasing pace somewhat. Having secured a healthy run of billet orders earlier in the period, Kardemir and other producers are now focused on export sales. But with Gulf shipping lines still cautious and some routes yet to normalize quotes, Gulf buyers' appetite for Turkish steel remains limited, keeping Turkish exports to the Gulf thin. Mills are holding relatively high FOB offers, and the market expects Turkey's export activity to remain characterized by low transaction volumes and steady pricing in the short term.

According to the report's price tables, Middle East import offers for Chinese-origin steel (FOB China) this week stood at: hot-rolled coil $483/mt, billet $460/mt, wire rod $516/mt, cold-rolled coil $550/mt, rebar $505/mt, and medium plate $510/mt. Notably, Turkish rebar commanded a substantially higher FOB range of $575–585/mt, reflecting both cost pressure from expensive scrap and limited competition from Gulf-bound Chinese material. Japanese and Indian suppliers offered no quotes this week, with most Chinese suppliers currently only willing to quote on an FOB basis rather than delivered terms - a sign that sellers are unwilling to absorb the freight uncertainty themselves.

On local pricing, the UAE's Emirates Steel was offering rebar ex-works at 2,921 dirhams/tonne, while other mills and imported material were priced around 2,900 dirhams/tonne on a delivered-duty-paid basis. UAE hot-rolled coil was quoted at $670–700/mt on a duty-unpaid, bonded-warehouse basis. In Saudi Arabia, Hadeed's rebar was priced at 2,800 riyals/tonne on a delivered basis.

Separate data cited in the report, from Mysteel's August 3 domestic-overseas steel price spread briefing, showed that international scrap, billet and hot-rolled coil prices mostly held steady or edged lower on a CFR-China basis, while Chinese domestic spot prices slipped 10–20 yuan/tonne across the board. The gap between international and domestic hot-rolled coil costs remained wide, with CIS-origin material commanding roughly 1,317 yuan/tonne more than domestic Chinese material after accounting for duties, and Middle Eastern-origin HRC showing an even larger 1,356 yuan/tonne premium.

From an export perspective, Southeast Asian market prices for hot-rolled coil, cold-rolled coil and hot-dip galvanized coil all remained above China's domestic levels, preserving export viability for Chinese mills - though the cold-rolled coil spread narrowed sharply to just 43 yuan/tonne, signaling thinning export margins for that product line specifically.

In a significant trade development, the U.S. Department of Commerce issued a final countervailing-duty determination on July 30, concluding that Egyptian rebar exporters received subsidies deemed actionable during the 2024 calendar-year review period. Egypt's Ezz Group - including several affiliated entities such as Al-Ezz Dekheila Steel, Ezz Steel, Ezz Rolling Mills, Al-Ezz Flat Steel and Contra Steel - now faces a 23.27% countervailing duty rate, which will also apply to all other Egyptian producers and exporters of rebar.

The countervailing-duty case ran alongside a broader antidumping and subsidy investigation launched by the U.S. in June 2025, covering Egypt, Algeria, Bulgaria and Vietnam. Commerce had issued a preliminary countervailing determination in January 2026 at a steeper 29.51% rate; on the antidumping side, Egyptian producers' preliminary dumping margins ranged from 34.2% up to 52.73% for some companies. The Commerce Department said it would disclose its calculation methodology to interested parties within five days of the final determination. Egyptian rebar has long competed with Turkish steel in global export markets, including the U.S., and the new tariff is expected to further erode Egyptian producers' price competitiveness there.

Data from the Turkish Steel Producers' Association (TÇÜD) showed Turkey's crude steel output reached 19.8 million tonnes in the first half of 2026, up 8.1% year-on-year. June alone saw output of 3.3 million tonnes, up a sharper 14.7% from a year earlier - a pace well above the first-half average. Domestic finished-steel consumption in June came in around 3.1 million tonnes, up a modest 0.4% year-on-year, while June exports reached 1.7 million tonnes, up 28.4%, with export value rising 29.7% to $1.2 billion.

For the first half as a whole, Turkey exported 7.8 million tonnes of steel products, up 2.5% year-on-year, worth $5.3 billion, up 1.3%. TÇÜD Secretary General Veysel Yayan noted that Turkey remains the world's seventh-largest crude steel producer, ranking ahead of Germany. He pointed out that after a period of decline in the industry through the first five months of the year, June brought a clear improvement in both output and exports, reversing the earlier downward trend, with strong demand from the Middle East and South America driving the export gains. Specifically, Turkish steel exports to the Middle East jumped 80% year-on-year in June to 212,600 tonnes, while exports to South America surged 406% to 182,500 tonnes.

India's steel exports rose 27% year-on-year in the first half of 2026 to 4.63 million tonnes. Although shipments to the European Union declined, growth in exports to Vietnam, the UK and the UAE more than compensated. Indian exports to the EU fell to 1.01 million tonnes in H1, down 19.8% from 1.26 million tonnes a year earlier, while Vietnam emerged as one of India's fastest-growing export markets, with volumes jumping from just 10,000 tonnes in H1 2025 to 650,000 tonnes.

Market analysts cited in the report expect India's evolving trade structure to continue shaping its export strategy in the months ahead, with new EU safeguard measures likely to keep pressure on finished-steel exports to Europe while semi-finished products - particularly slab, which falls outside the revised EU quota system - see rising shipments. Indian steelmakers are increasingly prioritizing Southeast Asia, the Middle East and Africa as trade barriers reshape global steel flows. Notably, a comprehensive economic and trade agreement between India and the UK took effect July 15, granting Indian steel exporters duty-free access for more than 1.1 million tonnes annually; roughly 80% of Indian steel exports to the UK will continue to enjoy zero tariffs, with the remainder covered by country-specific and residual quotas. India's HRC country quota to the UK was raised from 12,400 to 33,500 tonnes, and about 95% of non-alloy wire rod exports to the UK gained exemption from safeguard measures.

The report described early August as a period of "price distortion" for the Middle East steel market, as continued disruption to Hormuz and Bab el-Mandeb shipping routes leaves carriers offering only short-validity quotes with war-risk adjustment clauses, or suspending quotes on some routes altogether. Data from the Arab Iron and Steel Union as of August 1 showed international scrap prices broadly stable, iron ore and some finished-steel prices pulling back slightly, while billet prices in some markets actually rose - reflecting a growing divergence between raw materials, semi-finished products and finished-goods demand.

The core issue, the report noted, is not that mills lack offers, but that final landed costs are becoming difficult to pin down, since freight rates, insurance premiums, diversion fees and port surcharges can all shift before shipment. Importers are consequently placing fewer forward orders and favoring small, short-cycle purchases, while local mills lean on delivery certainty to sustain their pricing - producing a regional pattern of scarce import offers, stable spot prices, and weak actual transaction volumes.

Nippon Steel said on August 4 that continued instability in the Middle East is expected to reduce the company's steel exports to the region and push up logistics and raw-material costs. The statement carries particular weight for the Gulf plate market, since the UAE, Saudi Arabia, Qatar and Oman rely heavily on Japanese and South Korean sources for higher-grade hot-rolled coil, medium plate, automotive sheet and energy-project steel. Even where mills can maintain FOB quotes, carriers' reluctance to offer stable freight makes workable CFR pricing difficult to establish - meaning delivery times for Japanese and Korean material to import-dependent markets like the UAE could lengthen, pushing buyers to compare more closely against Indian, Chinese and regional stockpiled supply.

Meanwhile, ship-tracking data as of August 3 showed roughly 50 Iranian-flagged cargo vessels still operating across various international waters, ports and anchorages - indicating Iran's export shipping has not stopped entirely, though it remains far from normal efficiency, with some container and bulk vessels sitting idle at anchor for extended periods. Restricted shipping channels and tightened sanctions have significantly hampered Iranian exports of semi-finished products like billet, prompting some mills to redirect limited supply to the domestic market; domestic Iranian billet prices have climbed to around $423/tonne, creating an inversion against depressed export offers. Early-August news of possible U.S.-Iran talks has improved market sentiment somewhat, but buyers remain reluctant to sign long-term contracts until port access, shipowner confidence and settlement channels normalize. Iran has historically been an important low-cost billet source for Gulf, Asian and North African markets, and its continued absence is expected to keep supporting billet prices from Turkey, Russia and other regional sources, while raising procurement costs for nearby markets like Iraq.

Iraq and Syria are advancing plans to restore the Kirkuk-Baniyas pipeline and related logistics cooperation, aiming to reduce dependence on Persian Gulf and Hormuz Strait routes; Syria has separately floated a vision for a regional transport corridor linking the Mediterranean, the Gulf, the Black Sea and the Caspian Sea. While these initiatives are primarily energy-focused for now, the report noted that if related port, rail, pipeline and warehousing projects move into construction, they would directly drive demand for steel pipe, sections, plate, rebar and structural steel. For Iraq's steel market, rising transport risk at southern ports could push importers toward a greater share of Turkish overland supply and local inventory; for Syria, reconstruction demand potential is substantial, though financing, regulatory and security conditions still constrain rapid order releases. No unified new price quotes from either country's major mills were identified this week, so the report characterizes this as a reshaping of logistics routes and a build-up of anticipated project demand rather than a price rally that has already materialized.

Saudi rebar producer Watania Steel disclosed on August 4 a significant rise in first-half 2026 profit, driven mainly by higher sales volumes. Although the figures reflect first-half operations, their market significance is amplified by the current environment of shipping disruption and import uncertainty: Saudi domestic mills are gaining a relative competitive edge over imports through spot delivery, regional distribution networks and established project-customer relationships. Hadeed's earlier decision to hold August long-product prices flat similarly signals that major mills are prioritizing market stability over price cuts to boost volume, even amid soft demand. Saudi distributors remain generally cautious in their overall purchasing, with support coming from large projects and manufacturing orders rather than a broad pickup in general construction demand.

Separately, on August 4, Meranti Green Steel signed a term sheet with Marafiq-CUC under which the latter will supply industrial water for a planned direct-reduced-iron and hot-briquetted-iron project at Duqm, Oman. Water is a critical input for both natural-gas-based and future hydrogen-based direct-reduction projects, and the agreement marks real progress on the project's utility infrastructure. Duqm's location on Oman's coast allows it to largely bypass the internal port-access risks associated with the Strait of Hormuz, giving it added strategic value amid the current Gulf shipping crisis. If it proceeds as planned, the project would reinforce Oman's position as a DRI/HBI production and export hub for the Middle East, supplying low-carbon iron feedstock to electric-arc-furnace mills in Europe, Asia and the region. Equipment logistics, financing costs and international shipping schedules remain uncertain for now, meaning no new market supply is expected in the near term - the development instead reflects continued momentum behind Oman's push toward steel downstream development, decarbonization and export diversification.

Between August 1 and 5, the United States, Iran and Oman engaged in a fresh round of contacts aimed at restoring normal commercial navigation through the Strait of Hormuz, lifting market expectations of regional de-escalation and briefly pulling international oil prices lower; shipping-market sentiment improved somewhat from earlier weeks. Multiple international media outlets reported that the U.S. and Iran are negotiating a return to normal Hormuz transit, with Oman continuing to play a mediating role, though core issues - including navigation rules, channel management and security guarantees - remain unresolved.

Despite this progress, international liner operators and bulk shipowners remain broadly cautious. Most carriers have yet to restore normal published rates for Middle East routes; some are accepting only short-term bookings or requiring case-by-case negotiation per vessel, and war-risk surcharges, insurance premiums and emergency fuel surcharges (EFS) remain in effect. Freight forwarders report that, given the inability to confirm whether shipping lanes will normalize, August rate quotes to Gulf ports such as the UAE, Saudi Arabia and Qatar carry sharply shortened validity periods, prompting importers to broadly delay forward purchasing plans. As a result, Middle East steel, equipment and bulk commodity trade continues to run on short cycles and small order sizes, with the market widely awaiting a full restoration of normal Hormuz transit before restocking resumes in earnest.

On the project front, PowerChina's Sinohydro Bureau 5, together with Iraq's Al-Rasheed Company, signed a subcontract for the water-conveyance system of the Basra seawater desalination project in Iraq, valued at approximately RMB 8.925 billion. Located in Basra Province, the project involves designing and building a water-supply system with daily capacity of 1 million cubic meters, including roughly 240 kilometers of transmission pipeline, one main pump station and nine receiving pump stations - the kind of large-scale infrastructure investment that, as noted above, is expected to gradually translate into steel demand across the region as reconstruction and utility projects advance.