With the soaring US flat rolled prices and tight slab availability, slab suppliers are pushing for high slab prices as well.
Brazilian mills are still not offering much slab for export due to its strong domestic market and the coal accident at the Brazilian Praia Mole terminal at the end of last year, resulting in tight slab supply in the market. Moreover, the soaring US flat rolled prices have allowed slab suppliers to push for high level of slab prices and international slab prices have increased quickly in the past two months. Currently, Brazilian slab offers are at over $700/mt FOB, representing a significant increase of approximately $60/mt from a month ago. Market sources expect slab prices to continue to go up to even higher levels next month.
However, market sources question the sustainability of these high price levels beyond the end of the first quarter. The Chinese are currently out of the market for the Chinese New Year holidays-the slab market will have a better picture when they return.
The latest data from the US Department of Commerce's Steel Import Monitoring and Analysis (SIMA) system show that the total amount of slab imports into the US in the month of January 2011 was 329,464 mt, reflecting an increase of 31,873 mt when compared to the figure in December 2010. The countries that exported slab to the US in January were: Brazil, at 123,336 mt; Mexico, at 107,372 mt; Germany, at 35,081 mt; Japan, at 32,091 mt; and Canada, at 31,586 mt.