Turkey has shown some activity in import slab purchases within the past couple of weeks, amid decreased prices and its own high production costs. In addition, local hot rolled coil (HRC) prices have remained at relatively stable levels, although sales have been rather challenging. Moreover, Turkey is expected to remain in the market for some further slab purchases to be closed within September, given the cautious uptrend in the import scrap segment and the rather weak expectations in Asia, at least for now.
Currently, Turkey’s local HRC prices are at $580-600/mt ex-works, with $10/mt discounts possible, while captive slab production costs are estimated at around $170-180/mt. “If we take the previous round of scrap bookings at, let’s say, $355-360/mt CFR, then captive slab production costs come to around $535/mt on average. This means all slab below $500/mt CFR is workable, but everyone is seeking the best price possible,” a source told SteelOrbis.
According to sources, since late August Turkish HRC producers have booked several import slab cargoes, with the preference given to ex-Asia offers. In particular, Indonesia has sold at least one 40,000-50,000 mt cargo at around $467-468/mt CFR Turkey, versus the initial indications at $470-475/mt CFR for November shipments. The supplier is also reported to have traded slab to Latin America and the EU and the latest FOB prices have moved from around $430-433/mt FOB to $440-445/mt FOB, which corresponds to around $480/mt CFR Turkey.
In addition, Malaysia has been offering slabs at $495/mt CFR for November shipments, and, according to market information, has traded at least one cargo at around $490/mt CFR. “It is the usual thing, Malaysia is taking an advantage of being a duty-free origin and, although the price is high, it still fits HRC production costs,” a source told SteelOrbis.
Buyers have also reported there are slab offers from India for November shipment at $485-490/mt CFR. Some, however, assumed the price should be closer to $500/mt CFR. In any case, at least for now, these levels are not workable. The latest slab prices from China to Turkey have been reported at $470-475/mt CFR, with no deals reported.
Saudi Arabia has also been in the market for a couple of weeks now, offering for November shipment at $490-495/mt CFR but, according to reports, it has failed to collect attractive bids. Some buyers’ price ideas have not exceeded $465-475/mt CFR.
Russia’s price position for slab currently lacks clarity. While buyers report indications at $475-480/mt CFR, some suppliers say there are no firm offers at the moment. Prior to this week, there was talk about an ex-Russia steel slab cargo booked for October shipment at $465-470/mt CFR.