As a downtrend has prevailed in the Asian HRC market, customers from Southeast Asia and China have been looking for cheaper slabs, even though ex-Russia and ex-Iran origin materials are under sanctions.
According to market sources, a deal for 40,000 mt of Russian slabs has been done at $740/mt CFR to Indonesia. Also, around 60,000-70,000 mt of either Russian or Iranian slab have also been traded to Southeast Asia, though the price has not been confirmed by the time of publication. Some sources said that a discount of around $10/mt or above must have been given to push such a big volume.
In addition, a Russian mill has sold a sizable cargo of more than 40,000 mt to China at around $700/mt CFR. Another Russian producer has also offered at $690/mt CFR China, but no deals have been reported so far. Payment difficulties remain - Russian exporters cannot sell with LCs and in US dollars, so they are using mainly cash against documents or cash upon delivery (with only a small part of the amount being prepared). “China isn't scared of the situation… Russian slabs are sold to China not only for that market, but for [further sales to] the East Asian market,” an Asian source told SteelOrbis.
Most other slab origin offers are still at much higher levels, even though they have also gradually gone down. In particular, the ex-China tradable slab price level is $850-860/mt CFR Southeast Asia. Ex-ASEAN slabs could be traded at $880/mt CFR or even at $870-875/mt CFR, down from offers at $900/mt CFR heard early last week. Chinese or ASEAN slabs offers have been rare lately as sellers have watched the drastic fall in HRC quotations and as a result very low bids for slabs in the region.
The tradable price for SAE HRC in Vietnam has already reached $872-890/mt CFR, down by $20-23/mt from late last week.
In these circumstances, the SteelOrbis reference price for imported slabs in Southeast Asia has dropped to $740-850/mt CFR, with the midpoint at $795/mt CFR, which is $80/mt below the levels of $850-900/mt CFR, reported last week. The lower end of the current price range is reflecting the deal for Russian slabs, absent for a long time, while the higher end corresponds to the most competitive level for ex-Asian slabs which are not under sanctions.