Despite the downtrend in US flat rolled prices over the last month, slab prices in the US have remained high, as slab suppliers try to recover from the slim margin between slab and hot rolled coil (HRC) prices in early Q1. However, sources tell SteelOrbis that slab prices for April shipment are poised to be $25-$30/mt higher compared to March shipment prices as a result of the overall growth in demand for slab in the US. According to US import data, the US imported 41.6 percent more slab in 2011 than 2010, and 2012 import volume is expected to increase even more. Further, some supply constraints are helping to boost the price of slab, including production disruptions at Arcelor Mittal's Lazaro Cardenas, Mexico plant in January.
As for other sources of imported slab, offer prices from Brazil should be approximately $605/mt CFR for April shipments; CIS-produced slab offer prices to the US will reach $600/mt CFR; and offer prices from Japan are expected to be about $630/mt CFR for the same period. While US buyers will continue to make regular purchases in line with increasing demand, sources tell SteelOrbis that they are still being cautious with inventories--re-rollers are expected to keep inventory levels at 1.2-1.5 months, unchanged from January.