Shortage, HRC drive CIS slab prices further up

Posted on 04 September 2020

CIS slab export prices are shooting upwards on rising hot rolled coil and scrap indications. Demand from China, Southeast Asia and Turkey is driving suppliers to higher offers, while limited availability is ensuring they will have considerable success in achieving them in this round of sales.

The only two suppliers in the market are now marketing November-cast slab, but there is an extremely low October-casting availability that may become available from one of the suppliers. A major Russian merchant slab supplier is not in the market, as it is in the final stages of two-year old upgrades to its principal steelmaking facilities. Brazilian slab has thus far not been made available to buyers, and sources say it is sold out until the end of the year.

Southeast Asian buyers have ramped up their enquiries and prices are at $470/tonne cfr, and rising, sources say. A Chinese buyer paid $455/t cfr early this week, but subsequent offers came in at over $480/t cfr, with bid indications at $470/t cfr. Buoyant demand elsewhere is likely to enable sales at close to offer levels, amid rising HRC indications in China and wider Asia, and low slab import availability, traders note.

Meanwhile, having sold to Turkey over a week ago at $448/t cfr, a Ukrainian supplier increased its offers to $480-485/t cfr, Kallanish hears. Considering rising HRC and new highs for scrap prices in Turkey, participants believe deals are likely to be made at around $470/t cfr. At least one mill is in the market for slab currently, having achieved a $50-60/t HRC price increase during August.

A further strengthening in demand is anticipated to continue moving prices up, with iron ore prices unlikely to fall below $100/t cfr China this year, on seasonal and fresh industrial supply constraints. Both demand strength and a relative supply shortage will support CIS slab prices over the next quarter, some participants suggest.

Source : Kallanish