The international
slab market remains quiet, as demand is softening and purchasing activities are low, mainly due to the oversupply of
slab and the weakening of the flat rolled market in
China.
As
China’s demand for
automotive, home appliances and real estate investment had been strong earlier this year, steel demand and
production had been on an increasing track as well. According to World Steel Association’s (worldsteel) monthly crude steel
production report,
China had produced over 52.3 million metric tons in the month of August, which represents approximately half of the world’s steel
production and is a new monthly high. However,
China's domestic steel demand, particularly that for flat rolled, has been slowing since early September, with steel product inventories rising in turn. Meanwhile, exports remain subdued. With such a huge
steelmaking capacity and weakened domestic or export demand,
China's steel market is now at risk of an oversupply situation.
As
China's domestic flat rolled market has deteriorated and domestic prices have declined,
slab transactions in the market have slowed to a near halt, and there are currently hardly any
slab transaction to been seen in the market.
China's excess
slab supply and steel market slowdown is starting to impact the
slab buying in
Southeast Asia as well.
As
China, one of the major world
slab importers, and
Southeast Asia are currently very quiet on the
slab purchasing, international
slab suppliers are having difficulty selling and
slab prices have been declining. The most recent export
slab transactions were heard earlier in September, when Russian suppliers were offering
slab to the export market at about $445 to $475 /mt FOB.
Meanwhile, in the US, the domestic flat rolled market is still showing signs of strength, but it seems that minimill producers have already purchased their semi-finished materials for the next couple months of
production, which could cause some short-term weakening in US
slab demand. Furthermore, several North American blast furnaces have restarted
production in the last couple months, including
US Steel’s Hamilton, Ontario works which produces slabs, and this will eventually add more
slab supply to the market. For now,
slab supplies in the US market are still somewhat tight.
The latest data from the US Department of Commerce’s Steel Import Monitoring and Analysis (SIMA) system shows that the total amount of
slab imports into the US in the month of September (as of September 15, 2009) was 50,552 mt, representing a decrease of 70,792 mt when compared to August. The main
slab exports to the US during September are:
Japan, at 38,574 mt and
Brazil, at 11,978 mt.