Asian suppliers, namely, from Indonesia and Malaysia, have recently traded large volumes of slabs, and Turkey has been one of the buyers along with Europe and Mexico. The demand for Turkish hot rolled coil (HRC) has improved recently and therefore triggered interest in slab. In addition, import scrap prices in Turkey have also climbed. As a result, more slab may be booked to Turkish mills in the short term.
According to sources, a Turkish mill has booked two 40,000-45,000 mt slab cargoes from Malaysia, which is a duty-free origin. One cargo is for December shipment, and the other one is for January shipment: one has been purchased at $535/mt CFR and the other at close to $550/mt CFR, SteelOrbis understands. Currently, Malaysia, the same as Indonesia, is out of the market and is targeting $525-530/mt FOB, with freight to Turkey evaluated at $35/mt.
In addition, slab offers from Saudi Arabia have been reported at $550/mt CFR this week, up from $530/mt CFR earlier. Offers from a Russian mill have been voiced at $480/mt CFR with no business reported. “If they [Turkish mills] target selling to Europe, they have to buy non-Russian origins, and the thing is that others are pricey,” a trader said.
Since the workable HRC price levels in Turkey have climbed in both the local and export segments recently, some additional transactions are expected. While HRC is at $640-670/mt in the domestic and at $620-640/mt FOB for exports, the captive slab production cost is estimated at around $545/mt if the latest scrap price levels are taken into consideration. “If they want to add up to HRC production, they most probably would have to pay $540/mt CFR maximum for clean origins,” a source told SteelOrbis.