The European market, and Italy in particular, remains the center of the slab trade globally, at least for now, given the significant requirements of local flats and plate producers for semis when supplies from Ukraine have been disrupted. Mainly, ex-Asia slabs are being negotiated and prices have been rising day by day. It is noteworthy that the EU has announced a fourth round of sanctions against Russia due to its attack on Ukraine. Among others, the restrictions involve a ban on imports of finished steel and certain raw materials from Russia to the EU markets, while billet and slab seem to have been exempted. In theory, this means that Russia can continue slab supplies to Europe, specifically NLMK to its assets in Europe, but the reality is more complicated. One thing is the payment issue since it is impossible for Russia to conduct payments with European banks, along with the SWIFT payment situation. In addition, the handling of shipments is problematic. “For now, the European Union does not accept ships sailing from Russian ports,” a producer told SteelOrbis.
According to sources, two ex-Indonesia cargoes were sold to the EU at $1,000/mt CFR at the end of last week or at the beginning of this week. Later on, the same supplier has reportedly sold 40,000 mt at $1,030/mt CFR Italy. Another Indonesia-based producer is expected to announce its offers shortly and they are expected at an even higher level. In early March, Indonesia was selling at $900/mt CFR EU and these deals were followed by an ex-Vietnam transaction at $950/mt CFR, as reported earlier.
In addition to Indonesia, slab buyers from Europe have been receiving offers from China since the end of last week, which is unprecedented since the country has never been a slab exporter. Some sources believe that China and its ports are being used for trans-shipments of Russian slabs and in this case the offered prices have to be lower than the general market prices for prime origins. Others believe it is possible for Chinese mills to actually export their own slabs if they book the needed volumes to cover their rolling needs from Russian mills. In this case, the offered price may be higher. According to sources, the recent slab offers from China to Europe were at $1,045/mt CFR base and slightly higher for plate steel grade. Last week, the offers from Chinese traders were at $980/mt CFR.
In Turkey, business activity for import slabs has been relatively slow as the mills are trying to assess possible risks, HRC price trends, end-user demand and scrap availability. The most recent offers from Indonesia are at $1,020/mt CFR, while the prices from the Chinese sellers have been reported at $980/mt CFR. Brazil has been offering at $1,100/mt FOB recently, which comes to around $1,200/mt CFR to both Europe and Turkey. For now, Turkey seems to be restricted in working with Russia only by payment and shipping issues. The latest deal for a decent volume was closed at $900-910/mt CFR, as SteelOrbis reported earlier.
In Asia, prices for slabs have also continued to go up, but they have continued to lag sharply behind other markets. “I think that in Southeast Asia the market is not ready for $1,000/mt CFR for slabs, it is too high. Here, recent coil sales [in the local market] were still below this level,” a source from Indonesia said. The indicative price for slabs from Russia’s Far East region has been at $900/mt CFR, without any deals confirmed. But there has been information that some position cargo from a trader could be offered at $40-50/mt lower than this. No fresh offers of ex-Indonesia slabs have been heard in the region as all major sellers have focused on offering to Europe and Turkey. “Nominally, the slab price is $900/mt CFR, but it is unlikely that buyers will be active in buying at this price as the HRC price is also close to this level,” a slab seller said.
The SteelOrbis reference price for imported slabs in Asia has been increased by $60-100/mt over the past week to $860-900/mt CFR.
