Though major slab exporters have not been ready to provide visible discounts to Asian customers, most market participants believe that prices may decline further, taking into account the very weak demand for flat steel in the region.
An offer from Indian producer SAIL for slabs to Southeast Asia has been at $800-810/mt CFR, stable compared to late July. Another mill from India, which is offering higher grade slabs, has been asking for $840-850/mt CFR. But no new deals have been reported to Southeast Asia over the last ten days. “The market in Indonesia is still very weak,” a flat steel producer in the country said. Indonesia’s president is going to announce the extension of Covid-19 restrictions because, despite the fall in infection cases in Jakarta, the number of new cases has been on the rise in other areas like Sumatra, Kalimantan and Papua. The bad pandemic situation in Thailand has also held mills from new slab purchases.
The latest offers for ex-Russia slabs have been at $850/mt CFR to Southeast Asia, down by $20/mt from late July, but stable from last week. “The market is dull. It is unclear what the price level could be in future sales,” a supplier said. Asian traders believe that, with the current weak situation in the HRC market, buyers are unlikely to accept any price above $820/mt CFR for high grade slabs, SteelOrbis has learned.
A week ago a trial lot of ex-Indonesia slabs was sold to China at far below $800/mt CFR. But this price level was not considered as the market price for now as “this is a trial batch,” one of sources said. The Indonesian supplier Dexin Steel, a well-known billet supplier with Chinese investments, started slab production in June and has only one grade for now, not suitable for all slab users in Asia.
The SteelOrbis reference price for imported slabs in Asia has gone indicatively down to $820-850/mt CFR, down from $840-850/mt CFR in late July-early August, because of low bids and the worsening of sentiments in the market.