Slab prices are down, they may have bottomed out

World trade prices for slabs continue to decline in line with the overall global downward trend as it breaks down into a two-tier pricing system. Since Iran and Russia are in the lower price segment and somewhat limited in terms of sales geography, prices for their slabs are currently about $200-$250 per ton below offers from India, Saudi Arabia and Brazil.

As the end of the second quarter approaches, market sentiment diverges from the end of the first and the beginning of the second quarters, as re-rollers in Europe, the Mediterranean and North America struggled to replace supplies from the CIS countries that were unavailable due to the Russian invasion. Ukraine. Although Ukrainian supplies remain unavailable due to plant damage and ongoing hostilities, Russian slabs are being sold at lower prices, along with Iran.

It is mainly imported by China, as buyers from Southeast Asia are mostly left out not only due to compliance with financial sanctions, but also due to the continued weakening of the flat steel segment. The price for Southeast Asia is not clear as there are no requests for material right now, traders say. The ongoing talk that China is trading re-exports of Russian slabs at higher prices as its own has been dismissed as unfounded rumor by most market participants.

“There could be some minor incidents in this regard, committed by small one-day traders, but not a single self-respecting merchant will interfere in this. export their own, making a similar profit, without risk, ”summarizes one of the big traders.

The latest offers of Russian slabs to China last week were presented at $610-630/t cfr, while offers of $580-600/t cfr were rejected. Traders expect China to end up buying Russian slabs at $590-600/t as Russian mills' production costs rise and production falls, limiting the current Russian slab price correction. Growing demand is also likely to support prices, traders say.

Turkey also buys Russian slabs, but with exceptions, also due to sanctions. Those companies that rely on the export market to sell their finished products are not looking to Russian slabs, paving the way for Asian and Saudi material as Brazilian slabs remain out of their price bracket for now. Traders say Russian slabs in Turkey are offered at US$570-580/tonne francs, while Brazilian offers still start at US$800/tonne francs.

Europe receives Asian slabs ordered at the end of February and March, and only a few companies continue to use Russian material, including those with Russian ownership. Offers of Indian raw materials to Europe at the end of last week were at the level of $800-830/t cfr, but there was no interest after the May downtime and the receipt of previously purchased volumes.