Demand and prices for Russian slabs stabilized

Trading prices for slabs from Russia remained largely in the same range in September, with purchases traditionally made by Turkey and Europe. At the same time, the Russian Far East lagged behind amid sluggish sentiment in the market for finished flat products.

In fact, in September, Asia emerged as the larger supplier of slabs after an accident at a major South Korean producer forced it to offer its slabs to the trading market. Some of these volumes were purchased by Italian re-rollers (see Kallanish passim) at around US$600/t, but offers to China at US$525-535/t were not successful as they were considered too high. The Russian slab has also been less popular in China, with offers around the same level.

Offers of Russian slabs from the Black Sea remain at $480-500/t fob, while orders in Turkey have been placed at $500-510/t cfr in the last two weeks. Recently, however, continued weakness in the lira and growing uncertainty in Russia amid recent mobilization news have led to a decline in interest, although this is also due to ample restocking of Turkish factories.

There is generally no shortage of slab offerings, but it is difficult for buyers to replace suppliers, as slabs are technically more complex than billets, and replacements for billets are also hard to come by in Europe, notes one veteran observer. For this reason, most mills prefer to buy Russian slabs while they can, and expect more in the coming weeks. This is due to the fact that, in general, a decrease in domestic demand for flat products in Russia is expected.