Sao Paulo — Brazilian slab export spot prices rose in the week that ended Friday, still pressured by concerns on the imminent exhaustion of the import quota into the US and higher level pricing in the European market.
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Sign Up Multiples sources said that August is probably the last month to seal slab deals with US customers.
Companies are already negotiating September deliveries, when the 3.5 million mt semi-finished annual quota imposed by the US' Section 232 is expected to be fulfilled.
"The search for European customers is intensifying, as the exhaustion of quota-permitted slab volume into the US is approaching," said a trader. "Offers to Europe are ranging around $560/mt FOB this week, but I think it is tough to get it."
In turn, the US market continues a hot spot, as buyers are eagerly seeking to build up inventories with no taxed-slab to support the period without deals with Brazil. When the Brazilian quota fills up, the US slab rollers will have to buy the semi-finished steel with 25% tariff from other markets.
Deals with US customers were cited at $580-$590/mt FOB, a level that has been pursuit by suppliers several weeks before. "Slabs sent from Russia to the US will cost as much as $700/mt FOB, tariffs included," one player said, signaling that buyers have no choice than accepting Brazilian offers.
Market expectancy is that after the month gap without trade under the Brazilian-US quota, talks between the countries would come back by mid-October, focusing on 2019 deliveries.
S&P Global Platts assessed the weekly Brazilian export slab price up $5 Friday, to $565/mt FOB Brazilian ports, based on range of $540-$590/mt FOB for deals, bids and offers.
