Prices for ex-Asia slabs have been almost stable over the past fortnight, even though sentiment in China has worsened and prices for raw materials like iron ore have posted a significant decline. This has happened amid the reduced allocation for exports with very limited if any offers from China. At the same time, some small decline has been seen in ex-Russia slab prices as Russian suppliers have been trying to accelerate sales in the slow market conditions.
Official offers for ex-Indonesia and ex-Malaysia slabs have been at $510-520/mt FOB, stable over the past two weeks, but allocation for July shipment has been limited as the Indonesian mill managed to sell a lot of billet volumes, while orders books of the Malaysian mill were good after the previous sales to Turkey. Also, the lack of ex-China offers has been preventing any price declines from the ASEAN region, even though in general sentiments are still bearish.
In Europe, offers for ex-ASEAN slabs have been at $570-580/mt CFR, stable over the past fortnight. Even though the lowest FOB offer at $510/mt could correspond to $560/mt CFR Europe (for HRC grade slabs), there have been no reports of official offers at this level, considering the limited supply in general in the market.
“Chinese prices are not going down. Eventually I would expect them to, but I think the prices are following the trend for plate not for coil [in Europe]... Also, this rumor of an export limitation for slabs I think has made the Chinese more conservative on slabs [offering],” a market source said, adding that he believed the reasonable level for plate grade slabs would be around $580/mt CFR for Europe. Another market source said that there have been some offers from China at as high as $620/mt CFR, being out of the market picture, where even the previous deal price level at as high as $600/mt CFR is not workable now.
In the Turkish market, official offers for ex-ASEAN slabs are still not below $560/mt CFR, but more negotiations have been reported for Russian slabs. The sanctioned Russian mill has offered at $460-470/mt CFR, versus $480-485/mt CFR two weeks back. The offer from the only non-sanctioned mill from Russia has officially been at $505/mt CFR, stable over the past fortnight, but there has been talk, unconfirmed by the time of publication, that a deal has been done with a discount of around $10/mt.