The worldwide
billet market is as strong as ever, while the US
slab market is somewhat softer.
Although US flat rolled prices have been on the rise in other parts of the world, US mills have been struggling to get buyers to accept price increases. This is putting a lot of pressure on the US
slab buyers. While their counterparts in
Europe and Asia happily accept rising
slab prices, US
slab buyers are faced with the dilemma of having to buy slabs at prices higher than their current hot rolled coil prices or else risk the possibility of running out of slabs.
US flat rolled mills are all trying for a price increase for March and April shipments. However, it may be hard for service centers to raise prices for the end-users who have high inventories. Still, the US flat rolled market is expected to improve as inventories are depleted.
Slab imports to the West Coast primarily come from
Russia and
Brazil. Import pricing from all foreign suppliers is stable for the time being. Current
slab prices are in the range of $480-$500 /mt FOB port of origin.
The largest quantities of import slabs arriving in the US during January and February of 2007 came from
Ukraine with 166,701 mt,
Russia with 142,333 mt,
Mexico with 87,441 mt, and
Brazil with 63,177 mt.
Slab imports to the US during the period in question also came from
Australia,
Japan,
Venezuela,
Canada,
Austria,
Italy and
UK.
On the
billet side, increasing
scrap surcharges and the robust long product markets are pushing prices up, with domestic
billet prices now ranging from $475 - $495 /nt ($523 - $545 /mt). Supply is fair, while demand has been negatively affected by the current high prices. The cost to convert billets has risen so fast and by so much that some buyers have been holding back on purchasing. Fortunately, the strong
wire rod market has spurred the
billet market to start picking up. The domestic pricing trend for billets is still up.
Billet imports are mainly coming from
South America and
Europe.
CIS billet export offers are currently in the $540 - $545 /mt FOB Black Sea price range for May shipments. Chinese
billet offers are now higher than $505 /mt FOB. Certain re-rollers in North
Africa and
Turkey are now accepting a price level of $550-560 /mt CFR FO and higher. The upward pricing trend for import billets is expected to last for the next two to three months.
High
billet prices and the weak US dollar have prompted inquiries for US
billet exports to the
Middle East and
South America. However, while discussions are taking place, SteelOrbis has not confirmed any actual transactions yet.
On the import side, the most recent data from the
US Steel Import Monitor show that during January and February of 2007, the main countries that exported billets to the US were:
Brazil with 34,862 mt, and
Canada with 11,961 mt. Some other countries that exported billets to the US during this period were
Japan,
Russia,
UK,
Switzerland,
Mexico, and
China.