Posted on 21 Oct 2020
Chinese buying interest for slab is returning, Kallanish notes. However, prevailing prices for slab imports in international markets are generally too high for Chinese import buying.
Several trading sources believe the prevailing price for re-rolling slab is $470-475/tonne cfr Southeast Asia. An Indonesian re-roller booked 20,000 tonnes of Vietnamese-origin blast furnace re-rolling slab at $470/t cfr two weeks ago. This is equivalent to $460/t fob.
Iranian billet was previously booked at $467/t cfr China before the October holiday, a Thai trader reports hearing. Iranian slab offers are at around $430-435/t fob and freight from Iran is estimated at around $30/t. There have been no deals heard for Iranian slab after the holiday so far.
Over-rolled slab was offered at $440/t cfr China, for which Chinese traders gave a counter-bid at $420/t cfr which was not accepted. If it was new production slab, the bid would probably be higher at $440/t cfr China, a Chinese trader says. But a price tag of $470/t would be very high, he says. Assuming a $60/t processing cost, current hot rolled coil prices cannot support slab at this price level.
Taiwanese re-rollers are similarly seeking to book slab at prices which are "…impossible" to secure, a Taiwanese trader says. Working backwards from prevailing HRC prices in Vietnam at $530/t cfr, and accounting for minimum rolling costs of $60/t, plus freight and transfer fees of $30-40/t, these mills' slab asking prices are at $420-430/t cfr.
He hears that the Vietnamese mill that sold to Indonesia has started exporting regularly to China in recent months. "While China is always on the lookout for slab, the Chinese domestic market is not as positive as it was before," he notes.
Source:Kallanish
