Due to tight supply, international slab prices have increased significantly from a month ago.
Currently, international slab suppliers are offering slab at $540-550/mt FOB stowed at the loading ports in the CIS and Brazil, an increase of approximately $100/mt from a month ago. Some suppliers are now asking as much as $600/mt FOB stowed.
With the limited slab availability, some re-rollers re-enter the market and purchase slab to replenish inventory, and that allows the international slab suppliers to push for higher slab prices along with the increasing US hot rolled coil prices. However, re-rollers are not looking for building sizable inventories and are only purchasing to a certain degree just to cover their immediate needs.
End-use demand for finished products remain sluggish while raw material costs continue to rise, and re-rollers' profit margins are still slim; therefore market sources doubt if the current high-priced level is sustainable and do not expect slab prices will have another large price increase during the second quarter.
Moreover, as many blast furnaces will resume operation in the next couple months, slab supply is expected to see improvement in the second quarter. As a result, international slab prices may lose the upward momentum when the slab supply starts loosen in the market.
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 February 2010 was 286,424 mt, which represents a small decrease of 3,064 from January. The main countries that exported slab to the US in February include: Canada, at 125,074 mt; Mexico, at 113,401 mt; Russia, at 38,257 mt; and Germany, at 9,693 mt.