TEX reported that negotiations on steel slabs for Asia seem to have started for this quarter shipment. It is reported that a Brazilian mill is offering for Asia with the USD 10 to USD 20 markup compared with the previous quarter. A Russian mill seems also to have been offering at the range of USD 650 to USD 680 CNF.

Within this quarter, supply of slabs for Korea and so on by BlueScope of Australia is scheduled to stop. It is because the company suspends operation of the No 6 blast furnace within this month. With this, slab supply of 400,000 tonnes a year will disappear. However, it will not affect the Asian market for the time being because POSCO of Korea is said to have a plan to export slabs, and to be able easily to fill a gap of supply which might be caused by BlueScope.

A market price of hot-rolled steel coils came close to rise at one point but at this point, a gloomy atmosphere is coming out in the market. In Europe, a credit crunch is occurring due to the financial turmoil, and consequently, a phenomenon such that an order to a Korean shipbuilder from that area ceased is occurring. For this reason, overall, an atmosphere of a wait and see is coming out in the steel market.

For these one to two months, prices of slabs show almost no fluctuations, and continue to remain steady. However, at this point, the market is observed to be likely to take even slightly a turn of weakness. Such a case is happening that even if there is a demand, purchase of steel products cannot be made as financial arrangements become hard due to the financial turmoil. Under the situation, it seems to be natural that a manufacturer loses its grip to produce hot coils or plates even by purchasing slabs. With this, negotiations have not progressed, and the situation can be said that an offer price of a mill' side is hard to be accepted.

(Sourced from TEX Report Limited)