Prices for Asian slabs have increased sharply and buyers in some destinations (like Europe) have accepted the hike as it seems the shortage in this segment will remain critical for shipments in the third quarter.
The major Asian slab exporters are offering at $540-560/mt FOB for most destinations, except Southeast Asia, which remains low-priced. This signals a hike by $20-30/mt from the previous tradable levels in the last days of March. The Indonesian slab exporter hiked offers for July shipment by $20/mt to $540/mt FOB early this week. “We don’t see very active inquiries, but hope for them this month,” a representative of the mill said. The higher end of the price range - $550-560/mt FOB - is mainly for plate grade slabs and Asian mills that target the European market.
According to market sources, a few sales of plate grade slabs from first-tier mill have been done at $620/mt CFR Italy, while around ten days ago a cargo of ex-South Korea slabs changed hands at $610/mt CFR. The previous active round of purchases of import slabs happened in Europe in mid-March at $560-580/mt CFR, but at the moment “it is hard to find $600/mt CFR even for HRC grade slabs”, a source said. Such a huge price increase was due not only to bullish exporters’ FOB prices, but also high volatility in freight rates. For a large cargo, from China or Southeast Asia to Europe, the rates are above $60/mt, while for smaller volumes (around 30,000 mt) the rates are far above $70/mt, market sources said. “We heard that some sellers have $90/mt freight, so some offers are up to $650/mt CFR,” a trading source said.
“There will be a slab shortage for the third quarter because some volumes are being sold in Asia due to the shutdown of Iran, while some volumes from Asia were sold to the United States as Brazil has reduced exports there. Plus, in the spot market, allocation is low and prices are high, with NLMK running out of its quota [in Europe],” a European source said.
The latest Malaysian slab deal is heard to have been done to Turkey at near $540/mt FOB.
In Asia’s import slab market, the latest deal for 50,000 mt of Chinese HRC grade slabs was done at $475/mt FOB to Indonesia, which translates to around $505/mt CFR, up from the previous contract to the same country at $491/mt CFR for 10,000 mt two weeks ago.
