Posted on 25 Mar 2019
Buyers in southern Europe and Turkey continue to resist CIS slab offers and bid at much lower levels, pressured by a weak hot rolled coil price dynamic, Kallanish hears from market sources.
Offers remain at around $500/tonne fob Black Sea and $490/t fob Baltic. Buyers’ expectations however are at around $500/t cfr in southern Europe and $470/t cfr in Turkey, with ongoing strong resistance to book, despite low availability of the material, sources say.
There appears to be only one Ukrainian mill in the market, as a major Russian supplier has no availability and is said to be buying from fellow slab suppliers for its European assets. A northern Russian producer is supplying to northern Europe and has no need to ship to the Mediterranean, although if there was a preference, it would be cheaper to ship to Turkey, traders note.
Meanwhile, a third merchant slab supplier has closed April-casting books with sales to Southeast Asia, at prices around $490/t cfr. There is some slab availability from a Russian Urals-based flat products supplier, as its rolling lines are under maintenance, but this supply is purely opportunistic and will not be available again, sources note.
Soft HRC prices are now exerting considerable pressure on slab, which, despite being in short supply, is still available. Sources note that with European HRC prices at €500/t cfr southern Europe, it makes no commercial sense for re-rollers to buy slab at $525-530/t cfr. Some Turkish mils, which are now closed for May HRC rolling, could switch to producing more slab and less billet on their universal casters, as they have been doing this year, one source adds.
