Prices for Asian slabs have posted significant increases this week, related to active inquiries for slabs in the Southeast Asian market and given previous sales to Europe. Tight supply of slabs with suspension of shipments from Iran and rising freight rates have contributed to the latest trend, apart from stronger demand.
In Europe, the price increase has been the most significant - plate grade slab offers have surged by $20-30/mt over the past month to $550-580/mt CFR for all origins, while the major Chinese suppliers and at least two other Asian sellers have been quoting in a narrower range - at $560-570/mt CFR. There have been reports that a South Korean exporter has sold 30,000 mt of slabs to Europe at $560/mt CFR recently, while the leading Vietnamese mill has been in negotiations for two lots at a similar level since late last week. “All new shipments for slabs from Asia are expected to be done via the Cape of Good Hope, meaning a longer voyage,” a source in Europe said. Though the slab price increase has been partially due to rising freight and other transportation costs, the major drivers of slab prices have been rather tight supply and good demand, considering the recent increase in flat steel prices in Europe.
In Asia, the latest offers for ex-Indonesia slabs have been at $495/mt FOB for June shipment, surging by $25/mt over just one week. This happened amid sales reported at $470/mt FOB for slabs and HRC sales at $505/mt FOB in the local Indonesian market. Interest in slab purchases in Southeast Asia has been seen in Indonesia and Thailand mainly due to expected disruptions in ex-Iran shipments, which are estimated by market sources at a minimum of 150,000 mt of semis per month. Last week, a deal for 10,000 mt of Chinese A36 VD slabs was heard at $476/mt CFR Jakarta. At the same time, the availability of the cheaper option of Russian slabs is also limited in the Far East at the moment as the main Russian mill is sold out for May shipment.
Meanwhile, in Turkey, there has been a lack of interest in import slabs as most Asian indications are far above $500/mt CFR. The lowest price is available from the Russian non-sanctioned mill at $485-490/mt CFR, but buyers are reluctant to purchase due to CBAM uncertainties.
In Latin America, a deal for Taiwanese HRC grade slab has been reported at $490/mt FOB to Mexico. The main regional exporter - Brazil - has been offering officially at the very high level of $545/mt FOB.