Major headwinds affecting global finished products markets and squeezing feedstock prices continue to hinder merchant slab trade, with a softening dynamic prevailing in the past fortnight.

Amid declining finished and raw materials prices, re-rollers are either bidding lower or withholding enquiries, as they assess their restocking needs, aware of the possibility of further output cuts going into the third quarter. Demand picked up in mid-July, but has now waned again, with only a few mills enquiring, market participants tell Kallanish. 

Remaining demand is coming largely from Europe and the Americas, served by Brazilian suppliers, who reduced their offers to $650-660/tonne fob after selling several cargoes early in the month at $680-700/t fob. The lower offers produced another sale to Europe last week, as well as more enquiries that have thus far not resulted in any sales.

Amid the relatively wide pool of interest from higher paying markets, Brazilian slab suppliers may take time in evaluating their best selling options, traders note. This places Turkey, again, back into the Russian slab export market, where offers have not declined much, as compared to $500/t cfr Turkey two weeks ago. Bid indications however do not exceed $450/t cfr, sources note, and are relatively scarce, on the back of Turkey's flat product price reductions and rising uncertainty over third-quarter sales.

There were no slab offers seen from Indian suppliers after a series of sales to various regions at around $500-510/t fob India during the first half of July. But more Indian slab quotes are expected, as demand and prices of finished flat steel remain weak, and Russian hot rolled coil is available at lower prices, further undercutting Indian flat steel suppliers.

Demand from China is weak, but regular volumes are being sold there, according to traders, at low prices. The latest sales were spoken about in the market having been done at $480-485/t cfr, but could not be confirmed by press time. This price level roughly corresponds to other Asian slab-buying destinations, with no deals made in the last fortnight.