Asian slab exporters have cut slab offers since last week, leading to some sales, mainly to Europe and Latin America, though the suppliers are still unsuccessful in sales to Turkey. Some market sources believe that the market has not hit the bottom yet, as slab prices were too high in February and the recent decrease has been in line with expectations.
The major Indonesian mill Dexin Steel has dropped offers by $30/mt last week to $560/mt FOB. Two deals for 80,000-100,000 mt in total have been discussed in the market at $550-555/mt FOB to the European and Latin American markets. With freight at up to $40-50/mt, the deal price level translates to around $590-600/mt CFR Italy, and the deal was done for HRC grade slabs.
In addition, a 50,000 mt lot of ex-Vietnam slabs has been sold to the main Italian importer at $550/mt FOB, which is also around $600/mt CFR or just slightly below. This deal was for slabs for production of narrow heavy plates, and the deal signals that ASEAN suppliers have been under pressure to sell and have agreed to drop prices from offers reported at $635-645/mt CFR from the ASEAN region to Europe two weeks back.
At the same time, European customers are still waiting for a further decrease in plate grade slab prices. Ex-China plate grade slab offers are at $610-615/mt CFR Europe, but bids are $600-605/mt CFR mainly. “As for duty [on semis exports in China], everything is in a state of rumor. China is still active in offering slab. But some traders want to add a clause into the contracts - if a duty is suddenly imposed, then the risk is on the buyer or shared 50/50,” a market source said. The same Chinese traders want to add a similar clause when they are negotiating deals for billets, as SteelOrbis reported yesterday, March 12. Also, Malaysian slabs are available at $620-625/mt CFR Italy, and the non-sanctioned Russian mill has been asking at the stable level of $620/mt CFR, which is out of the range of buyers’ interest.
Though prices from Asia have dropped significantly, the general mood from China is negative, and market sources expect traders may go short and cut offers to $565-585/mt CFR for their next sales to Europe. The situation will depend on the availability of material.
In Turkey, activity has not improved, as price declines have been insufficient for importers. The latest bids for Asian slabs (excluding Malaysia, which is duty free) have been reported at $560/mt CFR, but for sellers from the ASEAN region it is more advantageous to negotiate in Europe. An offer from the non-sanctioned Russian seller has been heard at $580/mt CFR, while the indications for sanctioned ex-Russia slabs are at $520-540/mt CFR. The latest deal for slabs to Turkey was from the sanctioned Russian mill at $525/mt CFR Turkey around 7-10 days ago, down by $15/mt from the tradable level in late February.
As SteelOrbis reported earlier, an ex-Iran slab cargo is rumored to have been sold at $480/mt FOB, versus a previous deal at $471/mt FOB. The lot is likely for the Asian market with the level translating to around $515-520/mt CFR Southeast Asia.