/Rusmet.ru, Victor Tarnavskiy/ In July and early August global slabs market was down. The demand for semis fell in all key markets, since flat steel manufacturers reduced the output volumes and the prices for these products stuck or even went down. Besides some integrated plants in Europe and the USA started to offer slabs (very often at dumping prices) due to the difficulties with finished products sales. Russian and Ukrainian origin semis prices stabilized at $480-500 per ton FOB Black Sea ports.
However, the situation started to improve recently. According to the traders slabs manufacturers are planning the prices increase on September contracts offering their products at $520 per ton FOB and more. According to some sources there are plans about the prices increase to $540 per ton FOB.
All these offers are not approved by the consumers. In Eastern Asia, where the demand for slabs today is higher than in other regions, spot market prices amount not less than $550-560 per ton FOB. The US companies are also passive in foreign market. Nevertheless, by all appearances, the suppliers will manage to gain the prices increase.
The increase in HR steel market will further slabs prices increase. In Eastern Asia, the USA, and even Europe steel manufacturers are planning prices increase for September. In spot market the prices have also started growing. This increase can be not as high as the steel producers wish. However, it can cover semis prices growth by $20-30 per ton.
The rally in raw materials market can also play its role. Scrap prices increased recently and caused semis prices increase. In some regions semis prices became higher than slabs. In this situation the intention of flat semi products supplier to restore the priority is quite understandable. Iron ore spot prices remain at a rather high level as well. according to analysts this market is close to the peak. However iron ore prices fall is not likely to happen.
In the beginning of autumn the demand for semi products has to increase. Many Easter Asia companies did not make stockpiles for the summer and will have to resume the purchases soon. In Western countries the situation is more difficult. However, we can hope for some improvement.
Generally it is still hard to say if slabs manufacturers will manage to continue the prices increase in the Q4. But in September they have all chances for the success.