With the continued slump of flat rolled demand, US slab demand is still low and market activity remains quiet; however, if scrap prices continue to improve, then slab prices may register an up-tick as well.
Import slab prices continue to range between $300 and $310 /mt FOB loading port, and some suppliers may agree to even lower prices. And while there is a positive sentiment in the Asian markets which is resulting in some price improvement for slabs in that region, market sources mention that US re-rollers still have adequate slab inventories and are not planning to purchase slab in any significant amounts until demand for flat rolled products starts to improve.
Meanwhile, the recent up-tick in domestic and international scrap prices and increases in semis prices in some of the foreign markets have not resulted in any improvement for US hot rolled coil or slab prices as of yet. Market insiders suspect the recent scrap price improvement may just be the result of temporary inventory adjustments and does not indicate that the scrap market has embarked on an extended recovery. However, if the upward scrap pricing trend continues, prices for slab and hot rolled coil should follow the upward trend. But given the current lackluster steel demand situation, an extended rebound in raw material prices seems unlikely.
Although the US slab market continues to be soft, 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 in April (as of April 21, 2009) was 76,229 mt, which reflects an increase of 38,536 mt when compared to the figure of 37,693 mt in March. Nevertheless, this figure is 484,832 mt less than the 561,061 mt imported in April 2008. In April, the US imported slab tonnages mostly from Japan, at 34,767 mt; Mexico; at 26,932 mt; and Canada, at 14,530 mt.