Although the
US and international
slab demand remains tepid, international
slab suppliers are trying to push for higher second-quarter
slab prices due to the tight supply.
There is still no significant improvement in
slab purchasing activity, as demand remains dull and re-rollers have enough inventory to cover their needs for now. Although the bookings of finished products are improving, these orders are primarily from steel service centers and not end-users, so the real state of
slab demand is still uncertain. And with the higher raw material costs and a lackluster finished products market, re-rollers’ profit margins are getting tighter.
With the tight
slab supply,
slab prices continue to trend upward. There is rumor in the
slab market that international suppliers are trying to push the prices up to $500/mt FOB
US West Coast for the second quarter, while the current price is approximately at $430 to $450/mt FOB
US West Coast.
However, with many blast furnaces resuming operation for the second quarter in
Europe, Brazil and Japan,
slab supply is expected to increase in the third quarter. Therefore, re-rollers not only need to control their inventories carefully in the second quarter, but they also need to pay close attention to the market supply situation to avoid paying higher prices toward the end of the quarter.
The latest data from the
US Department of Commerce’s Steel Import Monitoring and Analysis (SIMA) system shows that the total amount of
slab imports into the
US in the month of January 2010 was 289,488 mt, which reflects a large increase of 119,822 mt from December 2009. The main countries that exported
slab to the
US in January include:
Canada, at 147,519 mt;
Russia, at 75,562 mt;
Australia, at 35,893 mt; and
Mexico, at 30,513 mt.