There has been a lack of slab sales from both the ASEAN region and China over the past three weeks, mainly as sellers have been ready to provide only limited discounts, while buyers in the major sales destinations have been looking for lower prices.
Ex-ASEAN slab offers were at $500-510/mt FOB in late June, down by $10/mt from the levels reported three weeks earlier, but stable over the previous fortnight. The main Indonesian producer has been focusing on sales of trial HRC lots as it started its 2 million mt line in June. So, with good order books for billets, the seller has not been so eager to push higher slab volumes abroad and to cut prices more. Also, as it will take time for the HRC capacity to ramp up, in the coming month the allocation for slabs may change only slightly.
As for Malaysian slabs, after the latest official offers at $510/mt FOB, the tradable level has been assessed at $500-505/mt FOB, but no new deals have been reported so far. The main Malaysian mill Eastern Steel is also going to start HRC production, with its launch officially scheduled for October, and this will significantly impact slab allocation from the mill. However, some sources believe that the launch may be postponed further to early next year. “Slabs are generating better profits than HRC. And Turkey doesn’t have duty [for Malaysia]. With competition on the rise, it is more reasonable to enjoy better slab prices,” a Singapore-based source said.
Allocation of slabs from China has remained limited and offers have been high. For instance, offers for ex-China plate grade slabs to Europe have been at $600-620/mt CFR, versus $620/mt CFR three weeks ago. But even $600/mt CFR has been considered by market sources as too high and one source said that nothing above $580/mt CFR could work out. Official offers from the ASEAN region to Europe have been at $570-580/mt CFR, but discounts on firm bids are possible. Market sources assess the workable level for ex-ASEAN slabs at $550/mt CFR.
Moreover, other suppliers have been cutting prices. For instance, a deal for ex-Russia slabs from the non-sanctioned mill has been heard at $520/mt CFR to Europe and, though this has not been confirmed by the time of publication, the market sources agree that $510-520/mt CFR is reasonable for Russian slabs as demand for them is limited.
At the same time, the Turkish market has been totally silent with ex-China HRC grade slab offers heard at $530-535/mt CFR, which has been out of the range of interest of buyers, considering the worsening local flat steel market. Also, sanctioned Russian slabs are still available at $460-470/mt CFR Turkey.