TEX reported that there are enhanced signs of a surge in the world''s slab transaction prices for shipments in the April to June 2010 quarter. No new offers exist so far because slab supply negotiations have yet to start on April to 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 USD 200 per tonne in the slab exports they negotiate for April to 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 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 to March quarter stood at a level of USD 530 per tonne FOB in Asia, a price level that bordered on USD 600 per tonne C&F amid an upswing in freight rates. In the April-June quarter, they moved up to a level of USD 630 to USD 660 per tonne FOB there, going far beyond USD 700 per tonne C&F. At the time, the going price level was reported as USD 680 per tonne 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 USD 520 per tonne 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 USD 650-700 per tonne FOB. Besides, there is a possibility that if Brazilian slab exports are offered with a price increase of USD 200 per tonne, 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.