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| Q2 Slab Price Talks To Focus On $300-310 FOB In Asian Deals |
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It is likely that price negotiations will focus on a level of US$300-310/ton FOB in deals of slab supplies in East Asia for April-June shipments, with South Korea as a main destination. The world's slab transactions have shown no marked moves since March because of limited export activities by slab suppliers such Brazil's integrated steelmakers. For the main factor, demand for slab imports is slack in North America, where the USA's HR coil market has fallen to a level of US$440/ton until now. As a result, the going prices of slab imports into North America are estimated at a flat level of US$320/ton C&F. Demand for slab imports is stagnant in Asia as well. As a result, local users (electric steelmakers) are thought to have reduced bids by nearly US$50/ton for what they take for April-June shipments, compared with their purchases a quarter ago. It is understood that the users see the need to cut what they pay for slabs in falling prices of their products such as HR coils and heavy plates. Japan's integrated steelmakers are in course of HR coil export negotiations on April-June shipments to South Korea. There are suggestions that the negotiations could bring a price settlement of around US$400/ton FOB. In this connection, an appropriate price level of slabs is seen as US$300-310/ton FOB to meet HR coil production for export at around US$400/ton FOB. The current prices of Brazilian slab exports are estimated at a level of US$200/ton FOB. By comparison, export prices of Japanese slabs are forecast to stand at a level of US$300/ton FOB so far for April-June shipments. Demand for slabs will increase according as demand for HR coils increases, market sources believe. Under the existing circumstances, though, a rebound in slab prices is considered difficult. Various integrated steelmakers in Asia are committed to continued production cutbacks at their works. They are poised to respond promptly with offers once they get slab inquiries because they need to maintain operations of their works, thereby putting continued downward pressure on slab prices. |
| last modified : Fri 01 May, 2009 [10:43] |
