Turkey continues to receive numerous steel slab offers, mainly from Asia-based sellers, given that there is a need to substitute tonnages from Ukraine and Russia which are absent due to the war. In addition, due to the lower supply in the region, the prices for slab in Turkey and the EU are much more attractive as compared to Asia. However, Turkish mills are not showing much interest in import slab purchases lately, despite the significant spread between slab and local hot-rolled coil (HRC) prices.
According to sources, import slab offers for May shipments from Indonesia are coming at $1,050/mt CFR, the same as a week ago. Indian mills are trying to sell at lower levels, at $1,020-1,025/mt CFR, buyers report. The latest offers from China are heard mainly at $1,010-1,020/mt CFR and one lot has reportedly been booked by a Turkish mill at the lower end of the range. However, some buyers say there are offers for ex-China slab for prompt shipments at $995/mt CFR. It is noteworthy there are also offers from Vietnam in Turkey, which is a rare occurrence. One of the mills is offering $1,060/mt CFR for May shipments, though with not much interest seen.
Generally, Turkish mills are not so active in slab purchases as some of them prefer keeping their own melt-shops busy since the cost of production from scrap is lower compared to import slab usage. Domestic HRC prices in Turkey are at $1,250-1,350/mt ex-works today, which is $240-290/mt higher than most import slab offers. “Currently, the cost of production from scrap to HRC is around $330-350/mt maybe, with scrap being let’s say at $655/mt CFR today. And from import slab to HRC, the cost is up to $100/mt,” one trader estimated. As a result, producing one’s own slabs is more advantageous for Turkish mills at the moment.
As for the CIS suppliers which were traditional slab sellers to Turkey, the volumes are not there at present. Ukraine is not offering due to the war-related production and logistic issues and is expected to remain out of the market for a while now. Russian mills are trying to offer and negotiate some tonnages. In particular, last week Evraz offered at $980/mt CFR Turkey, but buyers consider dealing with them risky due to the sanctions. In its turn, NLMK, according to sources, has been actively seeking ways to solve payment and shipping issues and is expected to offer slabs within the coming 10 days or so. Around two to three weeks back, both Russian mills sold large slab volumes to Mexico at $900/mt FOB.