Although US domestic hot rolled coil (HRC) spot prices have increased approximately $60/mt since the end of December, slab prices to the US have not followed the sharp upward trend; slab buyers have to order stock far in advance, and hesitation in the flats market to purchase higher priced prodct indicates that the flats uptrend might not last much longer. Currently, slab orders for March shipments are approximately $575/mt CFR from CIS suppliers, and closer to $605/mt CFR from Brazilian producers--representing an increase of approximately $15/mt in the last month. Lower-priced slab shipments arriving in January and February, however, are helping US slab buyers maintain a comfortable margin between material costs and flats order prices.
As for demand, sources report steady demand for slab in the US and predict positive activity through the rest of the first quarter--barring an extraordinary event such as a natural disaster or sudden worsening of the Eurozone situation. However, US re-rollers are still keeping a cautious eye on the market, and maintaining slab inventory levels at about 1.2 to 1.5 months, which is slightly lower than levels in December.