Following the downtrend in US domestic flats prices in the last month, slab prices in the US have also declined, compounded by less-than-robust demand and increased availability of slab in the market. Sources tell SteelOrbis that re-rollers are being bombarded with offers from several different suppliers, allowing them to be more selective with suppliers and tougher in negotiations. As such, current import slab prices in the US from Brazil are now around $580/mt CFR for Q3 delivery, down approximately $40/mt in the last month; offer prices from CIS sources are at $570/mt CFR, down $50/mt; and offer prices from Mexico are expected to drop under $590/mt CFR for Q2 delivery, down $40/mt.
Looking forward, prices might decline further in response to economic conditions in other countries. For example, the Brazilian real has devalued against the US dollar, spurring Brazil to export more slab than it needs for its domestic market--the increased availability will only give US buyers more negotiating power. However, despite attractive import offers, demand for slab in the US is projected to remain slightly weak in the coming quarter due to high inventory levels at re-rolling mills--even though capacity utilization rates are hovering around 80 percent week-to-week.