Deals in Indonesia, Korea push slab import prices down in Asia

Slab import prices in Southeast Asia and East Asia have come down following at least two recent bookings closed in Indonesia and South Korea amid falling iron ore prices, sources told Steel First.

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One Indonesian mill was said to have booked a small cargo of slab from an Indian steelmaker at a price around $515-520 per tonne cfr.

In South Korea, a recent transaction with an unspecified supplier was concluded below $520 per tonne cfr, Steel First learned.

With Taiwanese hot rolled coil (HRC) re-rollers reportedly out of the spot market and a latest booking level of $520-530 per tonne cfr heard in Thailand, Steel First’s Southeast Asia import slab price assessment slipped by $10 to $515-530 per tonne cfr on Monday June 9 from the $525-540 level seen between May 19 and June 2.

Iron ore
The main reason for the lower prices was largely attributed to falling iron ore prices.

The Metal Bulletin Iron Ore Index for 62% Fe material dipped to $91.33 per tonne cfr Qingdao on May 30, its lowest level since September 2012, and has since only slightly recovered to levels around $94 per tonne cfr.

This compares to indices of $106.82 per tonne cfr on May 2 and $119.26 on April 8.

“Yes, the lower prices for slab comes mainly from [the lower] raw materials prices,” one South Korean source told Steel First on Monday.

“Slab prices came down by at least $10-15 since last month,” he pointed out.

Another market participant said that one Taiwanese re-roller has halted production as it has run out of slab stocks.

“$515 [per tonne cfr] is still very high – mills there wouldn’t pay more than $470 per tonne cfr at the moment,” the source said.

Another Taiwanese re-roller was said to have last paid around $460 per tonne cfr under a long-term contract deal with a Japanese supplier, while another one reportedly failed to receive any offers after submitting bids at approximately $490 per tonne cfr a few weeks ago.

A third source, based in Hong Kong, noted that the lower prices sought by the Taiwanese mills are for slab re-rolling grades.

“The higher prices of $515-520 per tonne cfr are mainly for structural grades, apart from those markets where the domestic flat rolled market is protected such as Indonesia and Thailand,” he said.

Further falls
Japanese suppliers could “accommodate”, he noted, and agree to lower their selling prices for slab in the near term.

“Going forward, I believe there will be more Brazilian availability too,” he added.

The South Korean source agreed with such a view, but noticed that Brazilian steelmakers were still unwilling to cut their slab prices as the USA market is “still doing good”.

“But it seems slab prices in the US from suppliers in the UK and the CIS came down recently,” he pointed out.

Steel First’s price assessment for CIS-origin export slab also fell this week on the lower range, to $490-510 per tonne fob Black Sea, following three weeks of stable levels of $500-510 per tonne.