Posted on 25 Sep 2019
CIS suppliers of slab have succumbed to buyer pressure to reduce prices, yielding sales and enabling mills to close their October-casting books, Kallanish learns. The price reductions were however shallow enough to maintain a plateau trend.
A key Russian supplier sold a relatively large lot to a Turkish producer at $392-394/tonne cfr Turkey, netting back to $380-382/t fob Black Sea, slightly above original Turkish bids at $385-390/t cfr. The same supplier and a Ukrainian supplier also sold volumes to Italian re-rollers at around $410/t cfr, netting back to around $385/t fob Black Sea, also above original Italian buyers' indications of around $390/t cfr. In the Far East, a Russian supplier closed several lots of slab at $390-400/t cfr Southeast Asia.
CIS suppliers are now practically out of the market, with only a couple of lots left, which are likely to be sold in Southeast Asia. The sell-out is due to mills reducing their slab output on negative market sentiment, such as is the case with the Ukrainian producer, and due to ongoing upgrades at their mills in Russia.
The Ukrainian producer is understood to have reduced its semi-finished and pig iron products allocations and is instead increasing its iron ore products export shipments. The reduction of offers has enabled sales at levels higher than buyers expected, and is a wise move on the part of the sellers, market observers note.
As prices of semis stabilised last week, several market sources conceded that the declining sentiment looks to be turning into a plateau. With careful planning and seasonal factors, such as the upcoming end of the monsoon season in Asia, which will divert some of exported goods to domestic markets, it could be the beginning of a slow rebound.
With hot rolled coil prices now at cost level in the majority of regions, any further declines would be quashed by slashing output further, sources add.
