Brazilian slab export offers to Asia are being negotiated in a price range of $360/mt to $370/mt, comparable with $340/mt to $350/mt last week, FOB conditions for the basic commercial grades.
The increase reflects strong demand from China, which has over the week placed nine orders for slab with one producer, according to local sources.
For exports to Europe, negotiations are ranging from $345/mt to $355/mt FOB, comparable with $345/mt FOB last week, but demand from the region remains weak. However, there are positive signs from Italy, according to exporters, who note an increase in requests for quotations.
Slab export offers to the US are currently in the $365/mt to $375/mt FOB range, against $355/mt to $360/mt FOB last week, but sales remain at low levels as doubts remain about the demand from the local auto industry, as most of the slab the US imports from Brazil are ultimately destined to serve the sector. However, many US automakers are beginning to restart operations, which could increase demand soon.
Additionally, slab shipments to the US through mid-June will be included in the third quarter quota under US Section 232.
Another source of strong demand is Canada, with negotiations under the same price range as the US.
It is estimated that today Pecem and Ternium, the Brazilian slab producers dedicated to exports, remain operating at a 90 percent capacity rate, while the other integrated producers are estimated to be operating at a combined 35 percent capacity, after recent announcements of other blast furnaces being idled due to the reduced domestic demand, reflecting the impact of the Covid-19 pandemic.
Indications from customs authorities remain pointing to a similar volume of slab being exported from Brazil in May, when compared with the 513,400 mt exported in April.