Over the last month, import slab offer prices to the US have taken a dive and are only expected to soften further in the near term. By the final week of August, slab offer prices to the US from traditional sources such as Brazil and the CIS regions had fallen to about $515/mt CFR for October shipments. But as slab buyers continued to face high inventories, there was no rush to place orders for October and November shipments. Further, as August was coming to a close, import slab offers to Asia had fallen below $500/mt CFR, and sources told SteelOrbis it wouldn't take long for those declines to impact slab prices for the US.
By mid-September, most re-rollers had purchased their slab needs for late October and early November shipments at approximately $470/mt CFR from Japan, Brazil and the CIS, reflecting a $30-$45/mt decline compared to shipments in September. Despite the significant drops, slab prices are anticipated to decline to $450/mt CFR or even lower by the time re-rollers book for December shipments. Slab inventories remain high in the US amid low flat rolled steel demand domestically. US flats prices have been on the decline so far in September and the next few weeks are expected to be characterized by relentless price softening. And since sales volumes for flats are decreasing rapidly, mill sources have told SteelOrbis they plan to reduce their slab purchases for deliveries in late Q4, and any purchases will be determined on whether the prices are low enough.