Open interest hits record high on CME N.EU HRC contract
Open interest on the CME Group's north European hot-rolled coil (HRC) contract reached a fresh record high on 3 September.
When the market closed 9,382 lots, the equivalent of 187,640t, was outstanding. The majority of interest centred on January-March, amounting to almost 4,000 lots, but it spread all the way out to September 2025.
August was the highest month so far this year in traded volume terms, with around 115,000t clearing, surpassing January's 105,380t. It was also the highest volume month since February 2023.
The futures activity stood in stark contrast to the physical market, where liquidity was very low as service centres concentrated on destocking rather than buying replacement coils. Tonnage captured in the index formation process in August was the lowest level since April 2023.
Germany's economic issues continue to depress sentiment in the northern European steel market. Weakening demand from some steel intensive end-users, such as automakers, has caused issues for mills throughout Europe, leading to an increase in spot availability at a time of weak appetite. Lead times are around 3.25 weeks, according to recent deals reported to Argus, as producers struggle to fill their rolling programmes.
Argus' benchmark northwest EU HRC index, which the CME contract cash-settles against, dropped to €576/t at the end of August from €605/t at the start of the month.
The futures curve remains in contango, with the front months softening markedly of late. October traded at €595/t today, down by around €25/t over the past week, while January traded at €644/t, after settling at €676/t a week ago. Physical market participants expect prices to grind lower in the coming months, as service centres continue to focus on cash generation, especially those approaching their financial year-end.
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Brazil HRC import prices rise on tariffs
Brazil HRC import prices rise on tariffs
Sao Paulo, 30 August (Argus) — Brazil prices for imported hot rolled coil (HRC) increased this week as tariffs on imported products kicked off and signs out of China's steel sector were mixed. Import prices for Chinese origin HRC into Brazil were heard around $545/metric tonne (t) cfr, sources said, up from the $470-494/t cfr range heard in the previous week. This sharp uptick followed Brazil's decision to increase tariffs on imported products after domestic producers claimed that unfair competition — chiefly from the east Asian nation — was hampering their operations. The new tariffs took effect in June but only started to be felt by consumers in August, sources said. Another reason for the increase in Brazil cited by some sources was a possible price floor reached by Chinese mills in recent weeks. These producers have expressed concerns about their financial health amid a slow economic recovery that precipitated multi-year HRC price lows in China earlier this month. Argus assessed HRC fob Tianjin at $442/t on 19 August, the lowest level since July 2020, when most of the global economy was in the midst of pandemic lockdowns. In the latest assessment, the HRC price rose to $462/t, up by nearly 4.5pc in less than two weeks. China sought outlets for its steel outside of the country, lifting exports of the broad category of steel and iron products by 23pc to 55.2mn t year to date July 2024 from the same period in 2023, according to customs data. At this rate, China's yearly exports in 2024 will be the highest since 2016. Brazil, Chile and Peru have been among the countries widely increasing their imports. It is uncertain whether the price increase will begin to weigh on demand, sources said, as buyers balance greater availability of imported steel against claims that many prefer domestically-sourced HRC. By Carolina Pulice Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Order ending Canadian rail work stoppage appealed
Order ending Canadian rail work stoppage appealed
Washington, 30 August (Argus) — A Canadian rail employees union is appealing federal government orders that last week forced the resumption of rail service and sent the union and two railroads to binding arbitration. The Teamsters Canada Rail Conference (TCRC) filed an appeal with the Federal Court of Appeal on Thursday, challenging labour minister Steven MacKinnon's order ending the work stoppage and sending the parties to binding arbitration under the Canada Industrial Relations Board (CIRB). The union also appealed CIRB's 24 August decision upholding that order . "These decisions, if left unchallenged, set a dangerous precedent where a single politician can bust a union at will," union president Paul Boucher said. Canadian Pacific Kansas City (CPKC) declined to comment on the appeal, saying only that "operations continue and recovery is progressing well." Canadian National (CN) did not address the appeal directly but said it is prepared to participate in binding arbitration. "While that process is ongoing, we are focusing on our recovery plan and powering the economy," CN said. MacKinnon's 22 August order ended the work stoppage less than 18 hours after the union launched a strike at CPKC, while CPKC and CN locked out union members . The work stoppage froze ongoing rail operations, even though shipments of hazardous materials and other products had already ceased. The union subsequently notified CN that members would go on strike on 26 August. That strike was averted by the CIRB ruling on MacKinnon's order. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Fortescue hold firms on 2024-25 iron ore target
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US OCTG, line pipe imports fall in July
US OCTG, line pipe imports fall in July
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