Brazilian slab export offers to the US are at $851/mt to the East coast and $867/mt to the West coast, CFR conditions for the basic commercial grades, for May shipment.
The prices are in average $17/mt to $21/mt higher than the expectations unveiled by producers last week, reflecting the reduction of availability of material from some of the most important players in the merchant slab market. According to an industry source, no deal was effectively closed so far at the new price level.
Sources mentioned that HRC prices remain strong in the US market, paving the way for an uptrend of slab prices in the short term. However, many in the US flat steel market believe currently high prices—which have more than doubled year-on-year—are unsustainable in the long-term.
A combination of factors remain positively impacting Brazilian slab prices, such as the historically high level of iron ore prices pushing up slab production costs; a scheduled short stoppage for maintenance at slab producer Pecem in Brazil; the reduction of slab production due to environmental concerns in Tangshan in China; and the domestic demand for slab in Brazil, which has imported 38,500 mt of the product in January and 62,900 mt in February.
Preliminary numbers from customs are indicating an increase in March from the 491,100mt of slab exported from Brazil in February.
