Business activity for steel slab has weakened in the market in Turkey, following the sharp drop in the scrap market and the continuing downturn in the hot-rolled coil segment. Moreover, the number of available origins is still limited and the price difference between various suppliers is huge, which confuses buyers. Generally, the expectation is for slab prices to decrease further, but a lot of buyers are going to watch the scrap market trend closely. In the EU, there is still demand from mills for slab imports which had been supplied previously by Russia and Ukraine. Still, the number of offers is limited for European buyers as well.
In Turkey, the most recent deal for ex-Donbass slabs, sold by a Russian trader, was closed at $570-575/mt CFR for around 20,000-25,000 mt, sources report. In the meantime, Russian mills were in the market to negotiate at around $590-600/mt CFR and similar levels were heard early this week. However, following the downturn in the scrap and flats markets, buyers and sellers agree that the workable level now is hardly far above $570-580/mt CFR. Offers for HRC in Turkey are at around $770-800/mt ex-works, while $10-20/mt lower levels may also be achievable. As a result, the spread between Russian slab and Turkish HRC prices is $180-200/mt minimum, which implies large margins for buyers. However, dealing for ex-Russia material comes along with big risks due to international sanctions. Therefore, Turkish buyers are not in a rush to conclude deals. As an alternative to Russia, there are slab offers from India at $700/mt CFR for July-August shipments, which is too high for Turkish mills to pay. Offers from Brazil are at $750/mt FOB and the price delivered to Turkey would be not workable if the freight of at least $120/mt is taken into account.
In the EU, where Russia is restricted in sales due to sanctions, the offers from India are at $720-730/mt CFR, SteelOrbis has learned. Some market sources expect certain Asian mills will shortly voice their offers, targeting the EU market rather than the Turkish one due to more favorable prices. Around $700/mt FOB is possible from the major Vietnamese mill, taking into account its HRC prices. Though given the drastic price fall globally, the seller has to be flexible and offer close to Indian offers to attract any attention from customers. “I assume deals for slabs will be seen at least in the Italian market since there are customers who were earlier buying slabs from Ukraine and Russia and they need to buy semis in order to continue operations, at least at a reduced rate,” a source told SteelOrbis.