Although CIS merchant slab trade remains low, sales to southern Europe and Turkey in the past week have lifted prices yet again, with new offers expected at even higher levels, market participants tell Kallanish.
Russian slab was sold to Turkey at $710/tonne cfr, netting back to around $680/t fob Black Sea, while a sale of a large lot to Italy was heard at $710/t cfr almost two weeks ago, netting back to the same level. With more unfulfilled demand in both regions, the suppliers are heard to be indicating $700/t fob, amid limited availability from both Russian and Ukrainian suppliers, sources say.
Turkish demand is strong due to the recovery of demand and prices of flat rolled steel, which have gained around $130/t since the first week of January to $950-970/t ex-works for hot rolled coil. Turkish mills’ order books are now stretching into May, with practically no April-rolling material available, amid power supply restrictions curbing output and pushing domestic demand higher.
The alternative, Brazilian supply is also hard to come by, as regional supply remains tight, and prices are rising along with lead times. But market participants expect at least one lot of Brazilian slab to be contracted for April loading, as Turkish and Italian buyers continue to push towards diversification of supply. Falling US flat product prices are also playing to European buyers’ advantage, somewhat curbing possible price rises of Brazilian slab. Latest offer indications from Brazil were on par with the CIS at $670-680/t fob.
Meanwhile, the Southeast Asian market remained quiet due to the Lunar New Year holidays, but rising flat products price sentiment is supporting slab price growth in the region. Market sources estimate new price levels at $700/t cfr, although no offers or sales were made last week. Delayed by the holidays and the Beijing Olympic Games, demand is expected to be strong from mid-February, participants suggest.