Futures prices for hot rolled steel (HRC) on the CME exchange in Northern Europe continued to rise today, despite the lull in the physical market.
The two tapes of the second quarter were trading at 676 euros per tonne ($790 per tonne) during the morning session, and some derivatives market participants expressed a desire to increase sales. The last price for HRC for the second quarter during morning trading was 676 euros per ton. The March prices for raw materials were 663 euros per ton and 665 euros per ton, respectively. The spread from January to April was -33 euros per tonne, reflecting expectations of higher prices in the future due to supply constraints. On the screen, the April HRC traded at a price of up to 680 euros per tonne, up 7 euros from the previous day, before falling back to 674 euros per tonne. May and June prices increased by 13 euros per ton to 686 euros per ton.
March shipments were offered at a discount of 25 euros per ton compared to the fourth quarter, indicating a price of about 690 euros per ton at the end of the year, the trader said. This proposal would result in the EU's fourth-quarter contract being virtually equal to the HRC's fourth-quarter U.
S. contract with CME, based on yesterday's calculation of about $888 per short ton, which equates to about $805 per ton. According to sources, by 11:55 GMT, there were no sales on this offer, and it was expected that demand would be limited. Further dynamics are expected in the near future.
According to some sources, today's price increase may be the result of rising futures prices for Chinese coking coal on the Dalian Commodity Exchange today. Others said the increase was probably driven by improved sentiment in the EU steel market amid looming supply constraints. According to one of the sources, this may be due to the fact that import supplies are currently limited, as the import quotas of HRC in India and Turkey for the first quarter are completely exhausted and almost 80% exhausted, respectively, as well as due to a different risk-reward paradigm presented by CBAM.
Shipments of materials that have passed customs clearance at the berths, according to some individual buyers, in the fourth quarter and in the current quarter, this is still enough to prevent an excessive increase in domestic prices. According to the buyer, offers for positional cargoes from India were received at a price of 620 euros per ton, including CBAM.
