Posted on 19 Nov 2019
The price rebound in the CIS slab export market has continued in line with a demand pickup in major importing areas and supply constraints due to year-end maintenance and logistical concerns, say market participants.
Turkish appetite for CIS slab continues to drive up demand and prices, with new sales last week concluded at a solid $375/tonne cfr, and offers rising to $385/t cfr. This led to at least one lot of Russian slab sold at $380/t cfr late last week. Negotiations with some re-rollers have featured $400/t cfr for new bookings, based on current domestic and export hot rolled coil prices. This is the target for sellers in the next sales round, should HRC prices remain at current levels or rise, local sources tell Kallanish.
As was expected, delayed Turkish demand has fast pegged prices of CIS slab, with other buyers forced to follow suit. Although no sales to southern Europe were heard at the time Kallanish went to press, Italian buyers are now looking at an offer indication of around $390-400/t cfr. However, there is no guarantee they will be able to secure this level when ready to book, as prices continue to rise amid awakening demand.
Moreover, the expectation of alternative supply from Brazil being redirected back to the US and China, instead of sold in Europe or Asia, is supporting higher prices.
Although Southeast Asia remained largely on the fence last week, rising HRC prices in the region are pushing up potential slab pricing, from $385/t cfr earlier this month to around $400/t cfr. With January-casting books already considered and, in some cases, partially booked, buyers may yet again kick themselves for missing the opportunity to book at the start of the rising curve, and accept current offers.
This sentiment is especially poignant as Chinese sourcing of slab from the CIS, Brazil and regional suppliers looks likely to roll over into next round of sales, sources note.
