HRC deficit leads to further growth in slab prices in the CIS

Export prices for slabs in the CIS are growing on the back of an increase in hot-rolled steel and scrap. Demand from China, Southeast Asia and Turkey is pushing suppliers towards higher bids, while limited availability ensures that they make significant progress in reaching them in this round of sales.

The only two suppliers on the market currently sell slabs cast in November, but there is an extremely low availability of castings in October, which may be available from one of the suppliers. There is no large Russian slab supplier on the market as it is in the final stages of a two-year modernization of its main steelmaking facilities. Brazilian slabs have not yet been available to buyers and sources say they are sold out by the end of the year.

Sources say Southeast Asian buyers have increased their requests, with prices at $ 470 per tonne and continuing to rise. Earlier this week, a Chinese buyer paid $ 455 per tonne francs, but subsequent bids began to come in at more than $ 480 per tonne francs, and the quoted rate was $ 470 per tonne francs. Traders note that strong demand in other countries is likely to keep sales close to supply, amid rising HRC figures in China and wider Asia, and low availability of slab imports.

Meanwhile, having sold to Turkey a week ago at $ 448 per ton, the Ukrainian supplier has increased its offers to $ 480-485 per ton, Callanish hears. Taking into account the rise in HRC and new highs in scrap prices in Turkey, participants believe that the deals are likely to be concluded at a price of about $ 470 per tonne. At least one mill is currently in the slab market, with high strength steel prices rising by $ 50-60 per ton in August.

Further strengthening demand is expected to drive prices up further, with iron ore prices unlikely to fall below $ 100 /t in China this year due to seasonal and industrial supply constraints. According to some participants, both the strength of demand and the relative deficit in supply will support slab prices in the CIS in the next quarter.