Global merchant slab supply tightness spurred by the absence of CIS material in the first half of March has eased somewhat amid new sources making themselves available.
As was expected, China obliged, but at prices exceeding those of hot rolled coil, amid buyers’ desperation and still relatively limited availability, Kallanish learns from market participants.
Around two weeks ago, Indonesian and Chinese slab was available at $900/tonne cfr southern Europe, but prices have since gained around $200/t, with latest Chinese offers at a firm $1,000/t fob, according to traders. Some suggest bookings were made at slightly lower levels, at around $1,080/t cfr into Europe, with freight calculated at around $110/t for large, 50,000-tonne lots, but these have not been confirmed. European domestic mills were heard offering at €1,000-1,010/t ($1,100-1,111) ex-works, but no sales were reported at these levels.
It is understood however that some Russian merchant slab suppliers were also able to negotiate sales into Europe. Considering semi-finished steel products have not fallen under sanctions, and some Russian producers are also not under sanctions, sales have been heard in the past ten days. These were made at much-lower-than-Chinese-and-Brazilian-material levels, just below $800/t fob Black Sea, according to sources. They still involve high risk, at least from a lack of certainty. Lead times are also short, due to high risks and the constantly changing environment, sources note.
The same level of interest and pricing is seen in Turkey, with at least one lot heard sold from Russia around a week ago at $900-910/t cfr, but a confirmation could also not be obtained at press time. Chinese slab was booked mid-March at $965/t cfr Turkey for end-May arrival. The overwhelming market majority believes that should Russian sales continue, there is a chance of prices cooling, but forecasts are understandably uncertain.
Meanwhile, in the western hemisphere, prices have been heating up, with Brazilian slab reaching $1,150/t fob for concluded deals and offers at $1,200/t fob to regional producers. These offers are out of reach to Mediterranean buyers, not only due to their value, but also because of much longer lead times, and Brazil’s ongoing concentration on regional and North American sales, sources note.
There were no Russian sales or offers in Southeast Asia. Overall offers of slab appear to have dried up to regional buyers, and this shortage is likely to underpin price increases down the production chain, traders say. Many buyers hope Russian mills will focus on higher slab supply as finished product sales are more restricted, and domestic HRC demand is also expected to soften, at least in the next quarter.
Katya Ourakova UK