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US slabs buyers waiting for drop in prices to USD 300 CFR levels

According to preliminary data of USA"s statistics, in January the volume of purchases of slabs and billets materials was 1,869,000 tonnes whereas in the same month year before it was 4,172,000 tonnes. Moreover, in January the volume of the Russian export of semi manufactured materials in the USA was 1,575,000 tonnes, while for the whole last year was 6,631,000 tonnes. Thus, 84.2% of deliveries of semis in January had the Russian origin.

The American senate has confirmed in the end of February the program of stimulation of economy in cost USD 787 billion from which almost USD 130 billion it will be directed on financing of various projects. By estimations of Deutsche Bank experts it will lead to increase of steel demand approximately on 10 million tonnes in 2009-2010, but the effect will be seen not earlier than in the third or fourth quarter. First of all it will concern the market of long products. Thus, the increase of slabs demand in USA within the next two-three months, most likely, will not occur.

The prices on slabs on the American market practically have not been changing since January at USD 330 to USD 350 CFR for Russian and Brazilian production. However consumers declare that in second half of March and in April will happen fall in prices to nearby USD 300 CFR.

Besides, on the USA"s home market prices on hot rolled steel is decreasing. Many manufacturers have lowered the March prices to the level less than USD 550 per tonne ex work; therefore their desire to save the money on semis looks quite logically.

Mar 8, 2009 12:08
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