The north European hot-rolled coil (HRC) forward curve softened markedly today on the back of weaker physical sentiment and the strengthening euro.
August traded at €760/t and €750/t on the CME Group's contract, down from Thursday's settlement at €785/t. A fourth quarter 2023-first quarter 2024 spread traded at €5/t, with the outright prices at €745/t and €750/t. One physical seller was responsible for most of the volume, sources suggested.
Prices also slipped on screen, with May and June falling €25/t to €810/t and €785/t, respectively, while August and September dropped by €35/t and €30/t, to €750/t and €740/t. January and February 2024 were trading at €755/t, down €5/t and €10/t.
Traders in the derivatives market saw the back end of the curve as overpriced in the face of competitive Asian offers. India has been the cheapest import source, with recent deals concluded below €700/t into Italy for June shipment, and some larger German buyers saying they had access to similar prices.
The strong euro relative to the US dollar has made imports even cheaper for European buyers.
That said, supply is undeniably tighter from European mills, provided large end-users honour their contractual requirements in the coming months. The fires at ArcelorMittal Dunkirk in France and Gijon, Spain, have removed about 16,000 t/d of pig iron from the market, the equivalent of about 130,000 t/week of slab. Dunkirk is anticipated to be down for about eight weeks, according to market sources.
Argus' benchmark northwest EU HRC index, which is a cash-settlement basis for exchange-listed futures on the CME and LME, slipped by €1.75/t on Thursday to €843.75/t.