Quiet slab market continues in the US

US slab demand is still poor and the market remains quiet, as no significant improvement has been seen in the US flat rolled market yet.

Although the slab buying activity is weak in the US, it is active in Asia, particularly China. Last week, ex-CIS slabs were offered at $360 /mt CFR China for July and August shipment, and ex-Mexico slabs was offered at around $370 /mt CFR China; however, these prices have not been accepted by all Chinese buyers. On average, the international slab price in the second quarter is approximately $340 /mt CFR. But with the decent slab demand in China, market sources expect that slab suppliers will ask for a higher slab price in the third quarter.

However, higher international slab prices would bring a negative impact to the US market, as US flat rolled prices are not expected to have significant improvement with the current sluggish demand. If slab suppliers ask for a higher price and the flat rolled prices remain around the current level, the profit margin for US re-rollers would narrow.

With the US slab demand remaining weak, the amount of US slab imports decreased significantly in May. 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 in the US in May (as of May 27, 2009) was 243 mt, representing a sharp drop  when compared to the figure of 79,424 mt in April. China was the main slab exporter to the US during May.