*Blast Furnace Game Time?*
Steelmakers are planning on restarting several Blast Furnaces after being hot-idled for covid-19 in the US. Sentiment remains that the demand side of HRC is lacking. While US and European HRC curves remain in contango, US BUS scrap is pricing lower prints in Jul20 & Aug20. This has put pressure on the US mini mill spread. Scrap markets will begin trading after the July 4th holiday and will provide additional data points for the steel market suite.
HMS 80:20 Scrap
*Turkish physical scrap trades down lower*
Physical activity continues albeit it a slower frequency than of late and at lower levels. A handful of fixtures were completed to the tailend of last week at $255/t CFR levels. The latest booking comes from a Benelux based seller which was transacted at $254/t CFR average for premium HMS 80:20. Buying activity is expected to increase over the coming weeks as Turkish mills seek to acquire material for August onwards. On the futures side, the curve has been a touch stagnant of late with the curve remaining flat with value through to year end holding around $262/t.
Northwest European HRC
*Northwest European HRC index gains for the first time in over 2 months*
Following weeks of pressure, the Northwest European HRC index resurrected, rising €5.5/t this week. The first positive move since late April. Argus reports that large distributors have increased activity and have started to procure more material with the expectation of higher prices and longer lead times in the coming months. A small amount of futures activity has been noted over the past week with Jul trading at 405 and Q4 more recently printing at 435 in 500t/m.
FOB China HRC
*Chinese HRC quiet amid Dragon Boat Festival Holiday*
Chinese holiday stalled fob China HRC activity over the past week. Chinese mills continue to maintain their $250-465/t fob offer prices, amid stronger domestic selling prices. However, some market participants feel Chinese steel prices could come under pressure over the next few weeks amid seasonal heavy rain disrupting construction activity. Futures have remained largely unchanged over the week.