Steel
Overview
The price indices in our Argus Ferrous Markets and Argus Global Steel services are widely used by companies in physical supply contracts around the world – for iron ore, coking coal, hot-rolled coil (HRC) and ferrous scrap.
Many of them are used as the settlement prices for cash-settled futures contracts launched by exchanges to allow users of the derivatives who also transact in the physical market to minimize basis risk while hedging. These cash-settled monthly futures contracts are settled against the arithmetic mean of all the published Argus prices during each calendar month.
Using indices allows companies to trade material on an index-linked basis, not only via fixed-prices sales. This offers significant advantages when prices are volatile, yet the modern finished steel market remains primarily transacted on a fixed price basis. The addition of futures markets offers opportunities to enhance supply chain resilience further.
Latest steel news
EC implements 15pc cap on HRC other countries quota
EC implements 15pc cap on HRC other countries quota
London, 30 May (Argus) — The European Commission is implementing a 15pc cap on any individual country selling hot-rolled coil into the quarterly other countries quota of its steel safeguard. This effectively caps any country selling into the other countries at 141,849t/quarter for the rest of this year: the other countries quota for July-September and October-December will be 945,664t. If no grace period is granted, sources suggest this could lead to significant duties being incurred on 1 July, as many countries will have more than 15pc of the other countries volume in transit to the EU. The commission decided against any other individual country quotas on HRC, the notification said. The commission has been carrying out its review of the steel safeguard for months now. Market sources had anticipated Vietnam would get its own quota, while in recent months there have been suggestions Japan actively asked for its own quota. The liberalisation rate has also been reduced from 4pc to 1pc. The commission also notified the WTO the safeguard would be extended for two years, meaning there will be a brief six-month overlap between the safeguard and the imposition of the financial component of the carbon border adjustment mechanism (CBAM). "The commission also established the surge of imports from certain new origins was related to growing overcapacity in certain regions as well as to the significant pressure exerted by a strong increase in Chinese exports to certain markets," it said in the notification. China has been exporting record volumes of HRC this year, with significant tonnage going into nearby markets, such as Vietnam. The changes to the safeguard are subject to approval by member states, and the commission will hold consultations from 29 May until June 10 on the proposal. By Colin Richardson and Lora Stoyanova Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Vietnamese steel shipments to India to resume in August
Vietnamese steel shipments to India to resume in August
Mumbai, 30 May (Argus) — Vietnamese steelmaker Formosa Ha Tinh will resume steel shipments to India in August for the first time since its import licence was renewed in May, market sources said. About 60,000t-70,000t of hot-rolled steel has been booked at $590-595/t cfr India for delivery in August, with a major Indian pipe manufacturer among the buyers, traders told Argus . Relatively cheaper steel from Formosa could weigh on domestic prices, sources added. The Indian government earlier in May renewed Formosa's licence for certain hot-rolled and cold-rolled products, opening the doors to cheaper steel imports from Vietnam's biggest steelmaker. One of the approvals was for a type of hot-rolled steel under Indian Standard (IS) 1079, valid until 4 December. The steel grade is used to make pipes and tubes, but not commonly used for construction purposes. Many product manufacturers such as pipe makers and automotive parts suppliers use the IS 1079 steel grade and will have no issue replacing domestic steel with the cheaper Vietnamese material, according to a distributor. Domestic Indian steel prices have risen in April and May because of thin supplies as major mills underwent maintenance work. The Argus weekly Indian hot-rolled coil (HRC) assessment for 2.5-4mm material was at 54,000 rupees/t ($648/t) ex-Mumbai — excluding goods and services tax — on 24 May, up by Rs2,000/t from the end of March. Import pressure on prices also eased after the expiration of Bureau of Indian Standard (BIS) certificates for many overseas sellers, including Formosa, late last year. But supply is set to increase in the second half of the year as more imported material becomes available, according to sources. About 60,000-100,000t of material, consisting mostly of HRC, has been bought from China's Benxi Steel at $560/t cfr India and is expected to arrive next month. Some market sources have also said some quantities have been purchased from Japan for shipment over the next few months, although this could not be confirmed. The Indian government may try to issue more BIS certificates this year as there are only a handful of large domestic producers and fair competition must exist, a Mumbai-based stockist said. By Amruta Khandekar Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
BHP withdraws takeover offer for Anglo American
BHP withdraws takeover offer for Anglo American
Singapore, 30 May (Argus) — Australian resources firm BHP has withdrawn its takeover offer for UK-South African mining firm Anglo American despite a request for more time to discuss a possible deal. BHP had submitted a total of three takeover offers to Anglo American but they were all declined for significantly undervaluing Anglo American and its future prospects. All offers came with the same requirement for Anglo American to complete two separate demergers of its entire shareholdings in Anglo American Platinum and Kumba Iron Ore, its assets in South Africa, to Anglo American shareholders. The final offer was proposed on 20 May at [£38.6bn ($49.1bn)]($49.1bn), with the previous two offers at £31bn and £34bn , respectively. BHP has reiterated its intention to share in the cost associated that may be imposed as part of South African regulatory approvals and proposed some measures to "mitigate perceived value and completion uncertainty and ensure that any costs are not borne disproportionately by Anglo American shareholders", including sharing in the costs of increased South African employee ownership of South African businesses and maintaining current staff levels at Anglo American's Johannesburg office. "While we believed that our proposal for Anglo American was a compelling opportunity to effectively grow the pie of value for both sets of shareholders, we were unable to reach agreement with Anglo American on our specific views in respect of South African regulatory risk and cost," BHP said. Anglo American remained firm in its stance that its "shareholders will benefit from value transparency and undiluted exposure to a simpler portfolio of world class assets, consistently stronger operational performance and highly attractive growth in copper, premium iron ore and crop nutrients". It also said that it "has set out a clear pathway to accelerate delivery of its strategy and to unlock significant value for its shareholders". By Sheih Li Wong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Liberty Steel idles Galati blast furnace in Romania
Liberty Steel idles Galati blast furnace in Romania
London, 29 May (Argus) — Liberty Steel has idled its only operational blast furnace in Europe in the past few days. The furnace, at the company's Galati site in Romania, was idled because of the difficult market environment. "To ensure a profitable and sustainable production at Galati, we have decided to enter a temporary hot idle period and continue operating our downstream mills from slab stocks," a Liberty spokesperson told Argus . "During this period, we will focus on conducting maintenance and repairs to improve the performance and reliability of the blast furnace, and we will focus on consolidating the order book for customers in the profitable market segments." Liberty had been using financing from Exim Banca Romaneasca to procure raw materials for the furnace, according to market sources. The company is not producing any hot metal at its Ostrava site, in the Czech Republic, where it is looking to restructure. The company has requested a 25pc reduction in wages for workers at the site, which has been rolling some imported semi-finished steel. Nothing is being produced at Liberty Dunaujvaros, the former Dunaferr, in Hungary either, although the coke ovens are still running, according to workers at the site. The site was meant be supplied with slab from Galati. The tough market is compounding issues for Liberty, which recently said it wanted to sell or recapitalise its EU rolling lines . It also recently announced the mothballing of Liberty Merchant Bar, in Scunthorpe, UK, which in reality has not produced for many years. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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Explore our steel products
FOB China HRC
The rise of the Chinese steel market has moved in lock-step with the development of the country’s economy. Crude steel output soared since the start of the millennium and that spurred raging raw material demand, which upended the coking coal and iron ore markets.
By 2012, China had established itself as a source of steel without peer, and while export volumes have moderated since then, China still exerts the dominant influence over Asia’s steel pricing.
In March 2019, the London Metal Exchange (LME) launched a new FOB China HRC futures contract to help market participants to manage their price risk. The contract is settled against the monthly average of the daily price assessments published in our Argus Ferrous Markets and Argus Global Steel services, and it has rapidly established itself as the most successful finished steel futures launch to-date.
European HRC
Current European steel capacity is most densely concentrated in an area encompassing parts of France, Germany and Benelux. While capacity has rationalized, the European industry has proven resilient throughout decades of change and faces the problems of raw material and finished goods price volatility as well as globalized price competition.
Steel prices remain regional by nature and, like Asia, Europe is only beginning to experiment with steel price indexation. To support market participants with their price risk management, CME Group launched a North European HRC futures contract in March 2020. The LME has announced plans to launch their own N. Europe HRC futures contract in late 2020.
Argus has been selected as the provider of choice by both exchanges, and both futures contracts will be settled against the monthly average of the daily Argus price assessments provided in our Argus Ferrous Markets service.
CFR Taiwan Ferrous Scrap
The US East Coast and Europe look to Turkey to set bulk scrap price direction. Conversely, the US West Coast & Japanese supply looks to Taiwan to set container scrap price direction, which sets wider Asian scrap pricing.
Container markets parcel sizes are more liquid and frequently-traded markets, and the LME has launched a new Steel Scrap CFR Taiwan futures contract in July 2021 to support market participants hedge their risk.
Argus has been selected as the provider of choice by both exchanges, and both futures contracts will be settled against the monthly average of the daily Argus price assessments provided in our Argus Ferrous Markets and Argus Global Steel service.