*Physical scrap reaches one-month high
Another busy week on the physical front with the latest fixture completed by a Baltic based seller at levels $5 up from last done. The 35kt cargo included 29kt HMS 80:20 and 6kT bonus scrap, transacted at $265/t CFR and $275/t CFR respectively, with first-half August shipment. Scrap futures have ticked up with the improved sentiment as October traded $268/t. There was interest all the way through to the 21’ months with Q121 narrowing to 263/265 in 500t/m.
*The NWE HRC market seems paper lead at the moment
Following the recent gains on the Northwest European HRC index, sentiment looks to have settled. As we enter the holiday period across large parts of Europe, activity is expected to fall relatively silent. Chinese onshore continues to rally, which may allow some Northwest European based mills to look at other export avenues to support activity. A handful of trades have cleared over the block over the last week, with value generally moving higher. October printed last Friday at €435/t in 2kt, with more recently August trading at €425/t in 1kt.
*Onshore rally drives FOB China HRC futures higher
The FOB China HRC index has moved some $11 higher over the past week. Chinese sentiment remains robust, strong domestic Chinese steel demand and higher raw materials continue to move HRC prices higher. Argus reports Chinese mills increased offers by $5/t to $475-490/t yesterday.
The movement on the onshore market has had a noticeable impact on the fob China HRC market, with sizeable movements across the curve. Q4 futures were offered last Friday at $445/t, following the onshore rally Q4 is now trading at $460/t levels.