With ongoing uncertainty in the US flat rolled market, many US slab buyers have been holding off on making purchases for January and February shipments. The US import slab market continues to be a buyers' market, and domestic flat rolled mills are being mindful of their inventories, keeping them at comfortable levels given only moderate finished steel demand and relatively low steel production rates. US domestic flat rolled mills announced two price increases recently (one in October and one in November), and while spot prices did increase as a result, prices have stalled somewhat in the last couple days, and the market's immediate direction is unknown.
If domestic scrap prices do indeed rise in December--although many are now predicting a sideways and even possibly a downward move--and flats mills announce another price increase to try to regain some of their upward momentum, slab buyers may be more inclined to book slabs for Q1.The lowest slab price US domestic re-rollers attained for December shipments was approximately $455-$460/mt CFR from Brazil, Mexico and the CIS. Already, there are rumors that Brazil may try to raise offer prices to over $500/mt CFR to the Asian market, but such prices are unlikely to be acceptable to US buyers. Sources indicate that slab sellers are likely to push for an increase for Q1 slab shipments in the next few days, as they carefully watch the US flat rolled market trends.