Posted on 28 Sep 2020
The CIS merchant slab export market is in a lull, with no sales concluded in the past week. Both buyers and sellers have stepped back from the market amid iron ore and hot rolled coil price corrections in China. With a long Chinese holiday ahead, activity is not expected to resume until the second week of October, market sources tell Kallanish.
Asian market activity is also expected to resume after the break, traders say, possibly picking up at the same price levels where it left – around $470-475/tonne cfr. China's ongoing investments will continue to support demand, several sources say, suggesting HRC prices have bottomed and are likely to start rising post-holidays, propping up slab prices.
One Russian supplier located closer to and shipping from Far East ports is already sold out of November-casting material. It is expected to start offering from December-casting books towards mid-October, when China will return from the Golden Week holidays. The other two suppliers are also understood to be sold out of November-casting books, and are not expected in the market this week.
Turkey may need more volumes before December-casting books are offered, however, as one mill has experienced issues with casting slab and already booked two lots of CIS slab a week prior. Depending on finished product sales, the mill may require more slab, local sources say. They cite $470/t cfr Turkey as a working level at the beginning of last week, while Chinese futures' and HRC prices were still falling. "If $470/t cfr was available early in the week, it is not available anymore," a seller said on Friday.
The market needs to digest the increases of the last six weeks, and the Golden Week is offering the needed pause, sources say.
Meanwhile, Mexico opening an anti-dumping investigation into Russian and Brazilian slab imports is not perceived as a disruptive factor to CIS slab trade. Mexico on the whole has a shortage of slab and imports from Brazil, where the importer mill has a slab casting line, as well as Russia and Ukraine.
The Mexican slab buyer can only acquire slab from ArcelorMittal Mexico, the petitioner for the investigation. "Apart from yielding more control over its domestic slab buyer, I struggle to see what else the duty, if applied, may achieve," a seasoned trader says.
Source:Kallanish
