Cheaper iron ore, flat steel keep lid on slab import price increase in Asia

Asia’s slab import prices have recently moved up due to limited supply from the CIS, but the increase is still modest as iron ore costs are at a five-year low while the flat steel market remains depressed.

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Steel First assessed import prices in Southeast Asia and East Asia at $495-510 per tonne cfr on Monday September 1, up by $5 per tonne from the previous weekly range of $490-505 per tonne cfr.

Russian steelmakers recently increased their slab export prices because of the production and logistical problems created by the armed conflict in Ukraine, but cheaper cargoes from Brazil and India were said to have had a balancing effect on the Asian market.

Brazil’s ArcelorMittal Tubarão is said to have recently sold a cargo to an Indonesian mill at $505 per tonne cfr, for October shipment.

One cargo from India was also heard to have recently changed hands at approximately $510 per tonne cfr in Indonesia.

In the meantime, market participants reported recent offers from Russia as high as $530-535 per tonne cfr – which, for a comparison, is close to import prices in Southeast Asia for SAE1006 hot rolled coil from China.

“The bottom line is that steel prices are not going anywhere, so if slab prices are high, you just slow down your [flat steel] sales,” one regional market participant told Steel First late last week.

Iron ore prices fell below $88 per tonne cfr last week to a five-year low.

Chinese flat steel market participants are also not optimistic about September amid bearish sentiment and falling local HRC prices.

Slab buyers in Taiwan, South Korea and Thailand have been reportedly relying more on contract-based supply from Japan, with most of the activity in the spot market heard in Indonesia.

A source in Indonesia said that he did not believe in deals closed below $500 per tonne cfr in the country any more, as it happened some weeks ago.

“The ideal [buying] level indicated by the mills here is around $505 per tonne cfr,” he said on Monday September 1.

Prices below $500 per tonne cfr would still be possible, however, in North-east Asian countries – especially Taiwan, where at least one deal was heard last month even below $490 per tonne cfr.