Posted on 01 Aug 2019
CIS slab export prices are under pressure from low bids from Southeast Asian buyers and higher freight rates, amid still-weak finished products prices, Kallanish hears from market participants.
While a major Russian Urals-based supplier closed a sale to a Turkish producer at $435/tonne cfr, netting back to just over $420/t fob Black Sea, this price level now appears unachievable. Turkish producers, with their strong September hot rolled coil sales books are in need of slab, but their bid indications are currently circling $410-420/t cfr, in line with Southeast Asia. Buyers in the latter destination are indicating $435-445/t cfr, depending on origin and grade, sources say.
These bids net back to around $400-405/t fob, considering freight rates, and CIS suppliers are resisting, insisting on $420/t fob, in line with Brazilian offers. Brazilian suppliers' US export quota is 90% full, with only 10% left for the fourth quarter, and "…these volumes are already in ports, waiting for clearing," one trader notes. Some concessions will therefore have to be made in order to secure sales, but it is likely that CIS producers will reduce prices first.
The reduction is likely as finished product prices in all major buying regions are faltering, except for the US, but selling there is limited due to trade restrictions, sources say. Overall market sentiment remains soft in Europe and Asia, and Chinese imports of slab have thus far been limited to Iranian material, as it is the most competitively-priced.
