Major slab producers in the ASEAN region, in Indonesia, Malaysia and Vietnam, have been actively looking for export sales recently following weeks of silence. And though overall sentiment among the sellers has been improving, bids from customers in Europe, Turkey, Latin America and Asia have been below expectations.
The leading Vietnamese mill has been in the market with at least 100,000 mt of slab lately, with the offer price assessed at $520/mt FOB. However, most buyers in negotiations have been bidding with prices up to $20/mt lower. In fact, the levels of $500-505/mt FOB were already discussed in very early September, meaning that most mills have failed to achieve the targeted higher levels, at least so far. Offers from Vietnam to Europe have been at $570/mt CFR, with no confirmation of any sale yet, taking into account the big offer-bid gap. Also offers to Latin America from the same producer have been at $550/mt CFR or slightly above, versus bids from two customers at $530-535/mt CFR, with freight at $30-35/mt.
One of the largest Indonesian mills has been targeting $515-520/mt FOB for slabs lately after successful billet sales, while even last week the mill was ready for $500-505/mt FOB. As SteelOrbis reported earlier this week, Dexin Steel sold up to 50,000 mt of billet at $502/mt FOB, then around 20,000 mt were traded at $506/mt FOB and further sales of 60,000-80,000 mt have been reported today at $506-510/mt FOB, SteelOrbis has learned from market sources. Asian suppliers have been receiving offers from Dexin at $540-545/mt CFR Southeast Asia now, while another large Indonesian slab producer has been quoting extremely high prices at $530-540/mt FOB.
The latest prices for ex-Malaysia slabs have been reported at $510/mt FOB and rare sources said they have already seen the offer level at $525/mt FOB. But market sources believe that the situation may change. A lot will depend on the new volumes expected from the large 2 million mt per year mill entering the market during this period. Market sources said that the sintering plant, coke oven and BF are already operational at Eastern Steel’s new mill and first shipments of slabs may be from the end of October and in November. At the same time, the launch of the HRC line is scheduled in the middle of next year. “Most Turkish buyers will go for Eastern Steel,” a trader said.
In Turkey, demand for slabs has also been extremely weak and bids are still very low. An Indonesian deal at $540/mt CFR (around $505/mt FOB) has been denied by most market sources, being “extremely expensive for most major mills,” a source said. A non-sanctioned Russian mill is still offering at $505/mt CFR, while another sanctioned producer has been targeting $480-490/mt CFR, but only received bids at $450/mt CFR. With such bids and accelerated talk that Turkish mills will try to avoid buying ex-Russia slab, the Asian market has almost become the last option for sanctioned sellers.
In particular, a deal for a large volume has been rumored at $475-480/mt CFR to China lately, while some market sources said that the real price level was even lower, at $460-465/mt CFR, which, however, could not be confirmed by the time of publication. Last week, a Russian supplier was mainly targeting $490-500/mt CFR in Asia.