Open interest hits record high on CME EU HRC contract

: Metals
25/01/30

Open interest reached a record on the CME Group's north European hot-rolled coil contract yesterday.

The equivalent of just over 250,000t, 12,503 lots, was outstanding yesterday, according to exchange data.

The forward curve has been quite flat of late, after a sustained period in contango, but is starting to firm on the expectation of reduced import penetration. The European Commission is currently conducting a review of its safeguard measures and Eurofer has requested a 50pc cut to flat steel quotas, as well as a melt-and-pour clause on Chinese product.

Two February-March strips traded in the brokered market at €615-635/t today, while a 2,000t April trade concluded at €640/t, up €7/t from the last trade yesterday. February traded at €615/t on screen today, March at €635/t, April at 640/t and June at €650/t on screen.

Traded volume on the CME contract has increased by over 76pc this month compared with December, with over 125,000t trading as of today, also up from 105,380t in January 2024. The latest US CFTC Commitment of Traders report showed short positions from producers, merchants, processors and users increasing by 519 lots in the week to 21 January, while the long positions of managed money — funds on the other side of the trade — rose by 560 lots. Short positions are bets the settlement price, determined by the monthly average of Argus' daily north EU HRC index, will fall, while long positions are taken in expectation of increases.

A lot of the short interest is driven by traders and others hedging their inventories, while a good chunk of volume is also driven by participants in the wind turbine supply chain hedging plate exposure.

By Colin Richardson

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25/03/05

Salzgitter declares force majeure on steel coil supply

London, 5 March (Argus) — German steelmaker Salzgitter has declared force majeure on coil shipments after a fire disrupted its only hot-strip mill. In a letter sent to customers on 4 March, the company said the fire broke out on 28 February for "reasons unknown to us", and production has been interrupted as a result. The company said its single hot-strip mill will "probably not be able to produce at full capacity until the fire damage has been completely repaired". Salzgitter is making "great efforts and taking extensive precautions to ensure" supply, and asked customers to accept quantities quickly and smoothly. The force majeure came as the coil market awaits the results of the European Commission's safeguard review, which is likely to curb import supply meaningfully. Argus' benchmark northwest EU HRC index rose to €621.50/t yesterday, up by over €100/t in the past six months, supported by probable import restrictions despite sluggish demand. Mills have been in no rush to sell recently, as they expect prices to increase further once the results of the review are public. Market leader ArcelorMittal is currently targeting €680/t base, with an intention to move up to €700/t, sources suggested. Salzgitter's share price rallied today, along with those of its peers, predominantly because of news that the German government will look to lift its debt brake and launch a €500bn infrastructure fund. The company's share price was up by over 13pc today, as of 10:37 GMT, at €22.98. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexican peso dips, recovers on tariff hopes

25/03/04

Mexican peso dips, recovers on tariff hopes

Houston, 4 March (Argus) — The Mexican peso weakened on the US decision to go ahead with the 25pc tariff on all imports from Mexico and Canada Monday, but it recovered some losses today, suggesting the market is hopeful the tariffs may be short-lived. The Mexican peso lost 1.3pc to close at Ps20.71 to the US dollar Monday afternoon, according to data from Mexico's central bank. The declines came as US president Donald Trump late Monday reaffirmed that he intended to impose 25pc tariff on all products coming from Mexico, effective early 4 March. The peso on Tuesday continued its slide to the dollar, reaching Ps 21/$1 briefly in the intraday market before paring its losses and ending the day stronger at Ps 20.74/1$, according to Mexican bank Banco Base and Mexico's central bank data. Sentiment in the market is that the US administration will lift the tariffs sooner rather than later because of deep implications for the US economy. "The exchange rate and volatility have not skyrocketed, as the market speculates that the US government could withdraw the tariffs soon and that their imposition is mainly intended to give credibility to Donald Trump's threats," said Gabriela Siller, head of the financial analysis department at Banco Base, on her X account. The tariff will especially affect Mexican agricultural exports such as tomatoes, avocados or some vegetables, as well as the automobile industry, which heavily relies on Mexico to build cars that are sold in the US. In the energy sector, tariffs could partially disrupt Pemex's crude exports to the US, which would need to be diverted to other countries, especially to Asia, to avoid the 25pc tariff. Pemex primarily sells crude under evergreen or long-term contracts, allowing it to set prices and volumes buyers must accept. These agreements vary in duration, with some being indefinite and others requiring a minimum purchase period. The 25pc tariff imposed by Trump's administration could simply be added to Pemex's benchmark price and leave US buyers to decide whether to accept it. If they decline, Pemex could offer its crude at a discount to other buyers. Last week, Pemex management said it is prepared to change its commercial strategy in case the tariffs enter into effect. Pemex exported about 505,000 b/d of crude to the US last year, or 60pc of Mexico's crude exports in 2024, vessel tracking data show. The state owned company is likely to also be affected through its exports of high-sulphur fuel oil (HSFO) to US Gulf coast refiners, which are also optimized to convert HSFO — a low-value byproduct — into higher-value fuels like gasoline and diesel. The state-owned company exported around 130,000 b/d of HSFO to the US in 2024, down from 163,000 b/d in 2023, according to Vortexa. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Atlanta Fed model sees 2.8pc US 1Q GDP drop

25/03/04

Atlanta Fed model sees 2.8pc US 1Q GDP drop

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St Louis harbor water levels to improve

25/03/04

St Louis harbor water levels to improve

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Low Italian plate prices to stem fresh imports

25/03/04

Low Italian plate prices to stem fresh imports

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