Slab prices from Asia have continued to decrease, impacted by the declines in the flat steel segment in the region and the negative sentiment in China, especially early this week. However, buyers are still reluctant to sign deals.
Official offer prices for ex-ASEAN slabs have been at $490-500/mt FOB, down by $10/mt since early June, while some sources said that $485/mt FOB is available in firm negotiations.
The main Indonesian producer has started commercial production at its new hot strip mill, with a capacity of 4.5 million mt of both carbon and stainless HRC per year. But this has not impacted slab allocation for now since production rates are low now and the mill is working on selling samples and trial lots to customers.
In Europe’s import slab market, the latest tradable level for ex-ASEAN slabs has been $540-550/mt CFR, versus official offers at $570-580/mt CFR two weeks back and the lowest achievable level at $550/mt CFR last week. But even this level is too high for importers, sources have said. The ex-Russia slab price in Europe has been stable at $520/mt CFR.
Turkish mills have increased their pressure on import slab pricing this week, taking into account the rather unfavorable situation in the hot rolled coil (HRC) market. The domestic HRC offers have declined to $580-590/mt ex-works with some discounts possible and the export numbers are even lower than that, while the production cost from scrap to HRC is currently estimated at $200/mt or slightly above. In the meantime, Turkish slab buyers find themselves not in a position to be able to pay the current import slab prices, though some offers have softened.
Particularly, according to sources, Chinese slab offers are now at $515-520/mt CFR Turkey for end-of-August and early September shipments, down from $530-535/mt CFR early last week. Ex-Malaysia slab offers have been reported at $530-535/mt CFR, down by $5/mt over the past week, while Indonesian slab is at around $525/mt CFR although some buyers believe $515/mt CFR is reachable for 50,000 mt. According to sources, some HRC producers are in negotiation specifically for Indonesian slabs, while others believe the prices should be much lower in order for Turkish HRC to be competitive. “Since Chinese HRC prices are at $540-545/mt CFR today. Import slab has to be close to $500/mt CFR so that Turkey can somewhat compete in HRC,” a Turkish slab buyer told SteelOrbis. However, it seems that Asia will hardly provide such discounts in the short run, while such levels and maybe lower levels are reachable only from Russia. According to sources, a non-sanctioned Russian producer is indicating around $500/mt CFR Turkey, while a sanctioned one is offering at $470/mt CFR with some discounts considered possible.