Despite rising prices, uncertainty reigns among US slab buyers

With raw material and flat rolled prices increasing precipitously in the past couple months, US and international slab prices are also expected to go up in the second quarter. However, there is still no significant improvement as regards buying activity.

While scrap and flat rolled prices are indeed rising in most markets, concerns about lackluster demand are keeping slab buyers from purchasing aggressively. Re-rollers are taking the “wait-and-see “approach and are hesitating to build inventory until it becomes evident whether the recent price hikes are sustainable. So for now, most slab buyers are only buying what they need and are in no big hurry to make purchases.

International slab suppliers are currently offering slab to the US West Coast in the range of $400 to $410/mt FOB. With further raw material prices increases taking place this month, slab prices are expected to follow the upward trend, rising by about $30/mt to a level of $430 to $440 /mt FOB for the March shipment. However, as steel demand is still slow, the main concern for most re-rollers at the moment is controlling their inventories rather than buying tons ahead of further price increases.

The latest data from the US Department of Commerce’s Steel Import Monitoring and Analysis (SIMA) system shows that the total amount of slab imports into the US in the month of December was 169,666 mt, which reflects a large decrease of 159,248 mt from November. The US mainly imported slab from Canada and Brazil during December at 105,413 mt and 57,352 mt respectively. Mexico also exported a small amount of slab to the US during the period.