SÃO PAULO Brazils spot market for steel slab exports has been virtually stagnant for the past few months amid very low prices in the international market and output issues.
Import prices for commodity-quality slab in Southeast Asia, one of the few regions in the world to remain active in the slab-buying market, have plunged by more than $100 per tonne over the past three months, local traders told AMM sister publication Steel First, which assessed prices at $455 to $475 per tonne c.f.r. this week, down from $575 to $585 in mid-March.
Prices in Southeast Asia are around $460 per tonne c.f.r., one source at a major Commonwealth of Independent States steelmaker said.
In Brazil, only ArcelorMittal Tubarão is said to be active in the export market, but it exports slab directly to some customers based on previously signed contracts, sources said.
The steelmaker has been producing slab at an annual rate of only 500,000 to 600,000 tonnes for export, and is focusing on more "special products," chief executive officer Benjamin Baptista told Steel First last month.
Gerdau Açominas SA, whose usual customers include California Steel Industries Inc. and AK Steel Corp. in the United States and Taiwan-based China Steel Corp., reportedly has made a few shipments this year but is now focused on putting its new 770,000-tonne-per-year hot strip mill on-stream, which means it will have a lower volume of slab, billet and bloom available for sale.
Usinas Siderúrgicas de Minas Gerais SA (Usiminas), the largest flat steel producer in Latin America, hasnt been exporting commercial-quality slab, only out-of-specification material, commercial vice president Sérgio Leite said recently.
And Cia. Siderúrgica Nacional SA (CSN) has not only been out of the export market for slab, but it had to buy the semifinished product in the first few months of 2013 because of problems with its iron ore output after previously buying slab due to maintenance works at its melt shop.
Output issues at both CSN and Siderar Saic, and the commissioning of Gerdaus hot strip mill, led to lower volumes of Brazilian slab available for export outside South America.
Issues in 2013 aside, Brazilian slab exports had already been falling for the past few years on low international prices and strong demand for rolled products in the country.
Output of slab for sale has decreased at most local steelmakers, data from Brazilian steel institute IABr show.
Output at ArcelorMittal Tubarão fell to 804,000 tonnes last year from 1.62 million tonnes in 2011 and 2.56 million tonnes in 2010; Gerdau produced 1.09 million tonnes of slab for sale in 2012, down from 1.21 million tonnes in 2011 and 1.17 million tonnes in 2010; and CSN produced no slab last year vs. 34,000 tonnes in 2011 and 54,000 tonnes in 2010.
Usiminas was an exception, increasing its slab output to 899,000 tonnes in 2012 from 708,000 tonnes in 2011 and 767,000 tonnes in 2010, but it expects to sharply reduce slab sales this year as it makes more finished steel.
Were it not for ThyssenKrupp AGs 5-million-tonne-per-year Cia. Siderúrgica do Atlântico Ltda. (CSA) mill in Rio de Janeiro state, commissioned in mid-2010, Brazils slab export figures would have decreased significantly over the past three years. Output at the mill, which is destined for ThyssenKrupps rolling facilities in the United States and Germany, rose to 3.43 million tonnes last year from 3.16 million tonnes in 2011 and only 435,000 tonnes in 2010, according to IABr figures.
Slab exports directly from Brazilian steelmakers in the first five months of this year reached 1.85 million tonnes, down nearly 30 percent from 2.61 million tonnes in the same period last year, IABr data show. Shipments to the United States fell to 1.06 million tonnes from 1.21 million tonnes, while South Korea took 124,951 tonnes, down from 333,178 tonnes in the same comparison.
No major change is expected in Brazils slab exports for the rest of 2013 unless prices recover in the international market, the trading sources told Steel First, although some support could come from the Brazilian currency, which has been losing value against the U.S. dollar since the middle of May.
"We still havent heard from (Brazilian) mills about any export offers for slab," one trader said. "But maybe the dollar (strengthening) makes exports viable."
A version of this article was first published by AMM sister publication Steel First.