Will we reach $260/t CFR for physical scrap?
Stronger Chinese demand for finished steel products has helped increase Turkish scrap import prices over the past week. Again, there were a handful of physical bookings completed late last week between $255-$258/t CFR. According to Platts a US based seller transacted an HMS 90:10 cargo (which also included shredded scrap) at an average of $262.50/t CFR. This normalises to approximately $258.50/t CFR for HMS 80:20. In turn, the front months on the scrap futures curve have ticked up a little with Aug trading between $263-268/t. The stronger Chinese sentiment should help support price levels on the front of the curve.
Additional export avenues for NWE HRC
The NWE HRC index continued to climb over the past week, although the upcoming holiday season lull in Europe could see the index flatten a touch. On the other hand, with stronger sentiment coming out of China, mills may be able to consider alternate export avenues, which could support the current levels. Futures activity continues to increase, with Q4 narrowing on Monday to 427/434, whilst Aug and Sep traded 417 in 500t and 428 in 1kT respectively.
FOB China HRC index reaches highest level since mid-March
A strong domestic Chinese steel market has helped keep FOB China HRC elevated over the past week. The index rose $6 on Tuesday to $454/t, the highest level since mid-March. Sentiment has also been supported by planned maintenance cuts in July, which Argus reports will reduce HRC output by 250,000t. Futures have generally ticked up over the course of the week amid the strengthening sentiment.