Slab prices have nearly hit bottom in April and continued its downward trajectory in almost all major markets. Prices have now very little room for further decline. We expect prices to remain range-bound in the short term before turning the corner in May.
Commodity Inside expects that any new waves of the COVID-19 outbreak in China can be more contained and would have a less negative impact on the economy. Hence, China is likely to continue its slow recovery path. Meanwhile, in Europe, governments are likely to start easing the lockdown in May. The US would likely relax the lockdown in some states even though the outbreak would not be peaked across the country.
Slab demand is going to slowly recover especially in Europe and China in the coming weeks. Chinese buyers are likely to import slab, taking advantage of the low prices. This is going to benefit the CIS producers. Slab prices are likely to go up at a slower rate, as the return of demand is going to be slow and affected by the devaluation of emerging markets’ currencies.
In the US, demand is going to remain depressed through May, but production cuts made by Brazilian producers will offer some support to slab prices, which are going to place a floor beneath prices. In fact, if the outbreak worsens in Brazil, the output could be more severely disrupted, especially for CSP, as it is located in one of the states with the fastest-growing number of cases.
This article is based on the latest update from our subscription report Global Merchant Slab Market Outlook. Our slab subscription report is comprised of monthly, quarterly and annual reports.
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