Activity has increased in the CIS slab export market in the past week, and it was fuelled entirely by China. Although Turkey and Italy still need to procure slab, the rising activity and subsequent price increase in China are leaving little chance to acquire material with earlier than an August-casting stamp, sources tell Kallanish.

Ukrainian slab found its way to China in the past week, followed by at least 50,000 tonnes of Russian material. The Ukrainian lot was sold at around $370/tonne cfr, netting back to $340-342/t fob Black Sea, while a Russian lot was booked slightly later and at a slightly higher level, sources note. Both suppliers booked August load readiness material.

Chinese demand has not stopped at CIS material, as Brazilian, Mexican and Indian product was also booked at approximately the same prices. Chinese demand is expected to continue, possibly paving the way for more Russian bookings. This is particularly the case for a Baltic-shipping mill, whose freight to China is around $10/t below that of ex-Black Sea. In the volatile and weak hot rolled coil market, more slab deals could be a possibility, traders note.

Turkish mills refrained from active bidding this week, after they rejected indications of $315-320/t cfr. It is understood that Turkish mills are now pushing considerable price increases in the domestic HRC market, with some buyers reporting a $20-25/t hike in offers this week. Turkish mills are in a particularly sensitive situation with protectionist measures intensifying in all major export destinations amid the ongoing strength of raw materials and weakness in domestic market prices.

Italy, which booked some CIS slab volumes in April, is likely to return for more next week or the week after. However, sources insist that while mills might find extra allocations for shorter than August lead times, they will be unwilling to reduce prices below those they are selling at to China. This is at least $340/t fob Black Sea and trending steadily upwards, they note.

Southeast Asia remains out of the market, with small, regionally sourced volumes traded sporadically, sources add.