Posted on 29 Sep 2022
Merchant slab prices from Russia remained largely within the same range over September, with purchases traditionally made by Turkey and Europe. Russia’s Far East meanwhile lagged behind amid lacklustre sentiment in the finished flat products market.
In fact, Asia has become a larger supplier of slab during September, following an accident at a major South Korean producer which forced it to offer its in-house slab in the merchant market. Some of these volumes were purchased by Italian re-rollers (see Kallanish passim) at around $600/tonne cfr, but offers to China at $525-535/t cfr were unsuccessful, considered too high. Russian slab was also less popular in China, with offers at around the same level.
Offers of Russian slab from the Black Sea remain at $480-500/t fob, and bookings in Turkey were made at $500-510/t cfr in the past two weeks. Lately, however, the lira’s ongoing weakness and rising uncertainty in Russia amid the recent mobilisation news has seen interest dry up, although this is also due to Turkish mills having restocked sufficiently.
There is generally no shortage of slab offers, but buyers find it difficult to replace suppliers, as slab is technically more complicated even than billet, and the latter’s replacement is also hard to come by in Europe, one seasoned observer notes. For this reason, most mills prefer to buy Russian slab while they can, and expect more availability in the coming weeks. This is because Russian domestic flat product demand is generally expected to decline, albeit not by Russian authorities themselves.
Sentiment remains stable, with worries over the European Commission sanctioning Russian slab at a time when re-rollers are struggling with major energy costs rises, and "literally fighting for survival", one source explains. Alternatives from Brazil are available at $580-600/t cfr, while Saudi Arabia is able to supply slab at $550-560/t cfr and India at around $590-600/t cfr, Kallanish observes.