A surge in raw material prices and the return of the appetite of Turkish customers is livening up negotiations for Brazilian-origin merchant slab steel, pushing prices strongly higher ahead of the festive season.
"There's an anxiety on the buying side to close deals before January, driven by fear that prices could be even higher next month," said a producer source.
Bids came in this week as high as $470/mt FOB, "but there's no immediate rejection when a higher selling offer is placed," he said, pinning the market's tradable value at $480/mt. "A deal today can't be below that level," he added.
Traders also said firmer raw material prices had boosted Brazilian slab prices and sellers' sentiment. "The rise in scrap and metallurgical coal prices was the main reason for surging slab values," one said.
The same trader said Turkish customers are once again "in the game", requiring great volumes for February and March deliveries. He added it would be feasible to see talks around the $490/mt FOB mark.
Most of the players surveyed were consistent in indicating a higher market level, prompting an S&P Global Platts weekly assessment of Brazilian export steel slab of $480/mt FOB on Friday, an increase of $31.50/mt compared with last week's implied midpoint of $448.50/mt.
