Russian steel slab exporters have managed to increase their workable prices in the Turkish market even though there has been no positive movement in hot-rolled coil (HRC). Still, the limited semis availability in the market and more than affordable rolling cost may have supported the cautious uptrend.
According to sources, the latest deal for 20,000 mt of ex-Russia slab was closed by a Turkish buyer at around $475/mt CFR for September delivery. Earlier this week, there were a lot of rumors in the market about deals at $425-430/mt CFR, but the actual transactions have not been confirmed by the time of publication. In fact, many sources reported this was the bid level from buyers, which seems not to have been accepted by the Russian suppliers. The previous deal for slabs to Turkey was closed around early last week at $450/mt CFR for a regular lot. Prior to this sale, a sanctioned mill from Russia sold at around $420/mt FOB or $460/mt CFR around two weeks ago.
“This latest sale seems high because it is from the producer, who is not yet under international sanctions. Still, it leaves much room for profitable rolling into HRC,” a trader told SteelOrbis. Others believe that the higher levels may stick for some, following the recent US sanctions imposed on Russia’s MMK. Although the mill has not been selling slabs to Turkey and even globally, some market insiders fear that soon the remaining option to buy slabs from other mills may also vanish. “Today using slab for HRC production is cheaper than using scrap and, if the cheap slab option is not there, then the cost structure will be different.
The lack of slab offers of alternative origins in the Turkish market might be another reason for a buyer accepting a higher price. According to sources, Indonesia was offering at $590/mt CFR since the end of the past week, while the prices from Brazil have been heard at $610/mt FOB, which is not workable.