The gap between Asian slab prices for Europe and for other sales destinations has increased towards the end of January as offers to Europe have surged, while some buyers in other destinations have managed to achieve small discounts.
In Europe, offers for plate grade slabs from China and Vietnam have been reported at $530-540/mt CFR for April shipment and up to $540/mt CFR, which is a significant increase compared to $520/mt CFR seen in mid-January. Though there have been no new deals reported so far, a number of market sources are fairly sure that some increase may be accepted, following the hike in HRC and plate prices.
As for HRC grade slabs, offers from Southeast Asia are at $510/mt CFR to Europe. The main Indonesian mill sold a cargo for April shipment at around $450-455/mt FOB a week ago, but not to the European market, sources said, so this week its offers are at $460/mt FOB for May shipment. Moreover, some traders have been looking for slabs from Libya and Saudi Arabia for the European market though no firm offers have been available by the time of publication.
According to SteelOrbis’ calculations, Asian slab suppliers will have CBAM costs in Europe (verified values) at €41-71/mt, while Brazilian suppliers may have the lowest costs - verified values of €29/mt and default values of €41/mt. So, European buyers have been actively looking for spot cargoes from Brazil, but there has been a lack of offers from this country as almost all the allocation for April shipment has been sold out. “Europe will not pay as high prices for slabs as the US, at least now, because announcing price increases [for finished steel] and achieving them are different things,” a market source said. The price indication for Brazilian slabs stands at $503/mt FOB this week, according to SteelOrbis’ information, up from $485/mt FOB in December.
In other sales destinations, like Southeast Asia, there has been no price increase, as finished steel prices in the region are also range-bound, and sentiments are rather pessimistic. A deal for 10,000 mt of Chinese HRC grade slabs has been done at $455/mt CFR Indonesia for March shipment, which is slightly below the deal at $457-460/mt CFR to the same country done earlier in January.
As a result, slab prices from Asia are varying from $440/mt FOB for the regional market, and up to $485-500/mt FOB for plate grade slabs for Europe.