Posted on 22 Feb 2019
Prices of slab offered by CIS suppliers continue to rise, fuelled by a shortage of material amid high demand and supported by higher primary raw materials and finished flat products prices.
CIS-origin slab sales were concluded at $480-490/tonne fob Black Sea this week to Europe, with offers at around $500-510/t fob for new negotiations, market participants tell Kallanish.
Demand in Europe is buoyant, supported by higher flats prices and seasonally good demand, while availability remains limited from CIS mills. The alternative, Brazilian slab is quoted at around $525-530/t cfr, but lead times are about a month longer than for CIS material. Moreover, these offer levels are likely to increase imminently, as Brazilian slab producers continue to focus on supplying North and Central American re-rollers.
Turkish buyers remain out of the market, likely to be focussing on diverting some of the billet casting capacity to produce as much slab as they can, where possible. Offers to Turkey started at $510-520/t cfr, but with bids at around $490-500/t cfr, no sales have been made this week, sources say.
The material shortage is tangible, with a major Russian merchant slab supplier sold out of third-party available material. Another Russian supplier selling most of its material through Far Eastern ports, meanwhile, has also closed its March-casting book, Kallanish hears. The latter admitted buying in Southeast Asia has been lacklustre in the past month, but early indications show demand is about to return. This comes as the region’s flat products mills increase their prices, and a seasonal uptick is just around the corner.
European demand is also "… just beginning to gain momentum," according to another source, with the region likely to continue booking large volumes, offsetting Turkey's absence in the slab import market.
