The reference export price for Brazilian slabs fell by $10 per tonne last month

In August, regional slab markets saw prices fall by $10–20 per tonne. In particular, average FOB Black Sea prices fell by $19 in August to $487/t, whilst the reference export price for Brazilian slabs fell by $10 to $570/t (FOB).

Brazil

According to SteelOrbis, the reference export price for Brazilian slabs fell by $10 in August to $570/t (FOB). Although the decline has been ongoing for several months, prices remain close to two-year highs, driven by strong domestic and export demand. 

Exports of Brazilian slabs are characterised by high volatility. According to the Brazilian Steel Manufacturers’ Association (IAB), the figure rose by 12.3% month-on-month in July — to 817,000 tonnes — following a 58% increase in June. The rise in exports in June was driven by increased shipments to the US (681.3 thousand tonnes), as well as to Europe — specifically Spain (44.6 thousand tonnes) and France (40 thousand tonnes). Supplies of Brazilian slabs to the US in July were made on FOB terms at a price of $621–643/t, and to Europe at $519–594/t.

At the same time, reserves for the domestic market are being maintained. According to IAB data, in July local companies reduced slab production by 12.4% compared with June, to 658,000 tonnes. Slab production over the first seven months rose by 5.2% year-on-year – to 4.65 million tonnes.

Turkey

Average FOB Black Sea prices fell by as much as $19 in August — to $487/t — although they had remained largely stable in July. Against the backdrop of rising sea freight rates ($44–46/t) due to drone attacks in the Black Sea and the volatility of the rouble, export prices remain nominal, as large consignments simply cannot be sold. At the same time, redirecting slabs to the Baltic makes logistics $55 per tonne more expensive. Under these conditions, Russian exporters are prioritising the domestic market and CIS countries.

Imports of steel slabs into the EU and Turkey have recently been limited and sporadic. Demand in the EU is expected to recover by September.

According to the Turkish Statistical Institute (TUIK), imports of slabs into Turkey rose by 7% year-on-year in July, reaching 315.2 thousand tonnes at an average price of $542 per tonne. The largest suppliers in July were Russia (170,000 tonnes, +69% year-on-year; average price — $547/tonne) and China (97,000 tonnes; average price — $523/tonne). It is worth noting that in the same month, Turkey exported 20.7 thousand tonnes of slabs at an average price of $665/tonne.

Due to regulatory requirements, local manufacturers are switching to the use of domestic raw materials. Since the start of this year, the Turkish domestic market has seen a significant increase in domestic production: in January–July, it rose by 19.9% year-on-year, reaching 9.39 million tonnes.

Other markets

In other regional markets, price trends have been fairly stable. Recently, prices for slabs from China and ASEAN countries have been supported by rising costs of raw materials, coking coal and coke. Asian slab exporters are pushing for price increases due to demand in the US and Turkey, as well as expectations of increased purchasing activity in Europe.

At the end of August, Chinese slabs were offered at $480/t CFR Indonesia (for shipment in September–October), which is in line with the previous month’s price level ($480–490/t CFR). The supply of the cheapest slabs from Indonesia (Dexin) is limited due to supply issues and drought, and the price has risen to $480/t FOB (shipment in November).

At the same time, average slab prices in Japan continued to correct following a sharp rise of $70 per tonne in April, falling by $10 in August to $570/t.

It should be noted that in July, regional slab markets saw a fall in prices of $3 per tonne. In particular, the reference export price for Brazilian slabs fell by $3 to $577/t (FOB). Following a period of high prices observed since March, a correction was inevitable.