The TEX Report Topics < Steel > Home
HOME >> Topics List >> March, 2010 >> 05 (Fri)
Enhanced Signs Of Surge In World's Slab Prices For Q2 Shipments
There are enhanced signs of a surge in the world's slab transaction prices for shipments in the April-June quarter, according to information made available in Tokyo. No new offers exist so far because slab supply negotiations have yet to start on April-June shipments. Spot purchases of slabs are seen as more difficult than before as slab cargoes for distribution are expected to become scarcer, a situation that is akin to what happened in 2008. For the year under review, the world's slab transaction prices shot up.

There are no reports of new offers at present. But rumor has it that some integrated steelmakers in a certain nation may offer a price increase of US$200/ton in the slab exports they negotiate for April-June shipments. In this connection, it is considered certain that the cost of slab production will advance as the world's transaction prices of blast furnace feed (iron ore and coking coal) look set to surge and spot slab deals are difficult to work out in a dwindling distribution volume of slabs, apart from long-term supply contracts.

In 2008, slab prices in the January-March quarter stood at a level of US$530/ton FOB in Asia, a price level that bordered on US$600/ton C&F amid an upswing in freight rates. In the April-June quarter, they moved up to a level of US$630-660/ton FOB there, going far beyond US$700/ton C&F. At the time, the going price level was reported as US$680/ton FOB in Central America. Therefore, transaction prices of slabs topped those of finished steel products such as HR coils and heavy plates, albeit a temporary phenomenon.

At present, slab prices in Asia are estimated at a level of US$520/ton FOB. As far as HR coils go, new exports out of Asia to distant area have begun to shape up at a price level of US$650-700/ton FOB. Besides, there is a possibility that if Brazilian slab exports are offered with a price increase of US$200/ton, the new offer price will top HR coil prices, a situation reminiscent of what occurred in 2008.

In Asia, meanwhile, various customers still indicate a dull reaction on the whole to the prospects of an advance in raw materials prices as to negotiations on new steel supplies. Nevertheless, the environment is forecast to undergo a major change if slab supply negotiations on Q2 shipments start with a considerable price increase.
last modified : Wed 10 Mar, 2010 [10:16]
Copyright (C) 2004 The TEX Report Ltd. All Rights Reserved.