Indonesia’s Slab Decline Expands, Hot Coil Supply Is Expected To Increase

This week, the latest quotation for slab from a mainstream steel plant in Indonesia is 540 USD/ton FOB, a decrease of 30 USD/ton from last week. At present, local demand in Indonesia is very sluggish, and there are relatively few slab transactions in the Southeast Asian region. Although the demand for Southeast Asian slabs in Europe has not significantly declined, inquiries from European buyers have decreased compared to before.Due to poor demand for sheet metal, Italian sheet metal prices have continued to weaken recently. Currently, the local market price for medium and thick sheet metal is about $808/ton EXW, while the European hot coil market price is about $760/ton EXW, a decrease of $10/ton from yesterday. Therefore, European buyers are more cautious in purchasing raw materials and are observing low-priced resources.

Since the beginning of this week, the prices of Southeast Asian hot coils have also weakened. However, due to specification requirements (Indonesian hot coils require SNI certification), the demand for local hot coils in Indonesia mainly relies on domestic resources. Therefore, the price of Indonesian hot coils has not been significantly affected by demand and has remained stable at around $750 per ton. However, currently, the demand for Indonesian hot coils is also weak, and the overall supply of Indonesian hot coils exceeds demand. According to Mysteel’s understanding, there is expected to be a significant increase in local hot coil production capacity in Indonesia in the future. There are currently three steel mills in Indonesia that will launch new hot coil production lines this year. It is expected that Indonesia will increase its hot coil production capacity by over 5.5 million tons per year. Some market participants have expressed that after the increase in hot coil production capacity in Indonesia, there is some room for local hot coil prices to decline in the future.