CME northern EU HRC forward curve firms

The CME Group's north European hot-rolled coil (HRC) forward curve firmed today, following price rises in important export markets.

This morning, May traded at €890/t, just €15/t below the underlying spot price. Argus' northwest EU HRC index was €905/t on 26 January. Later today, March traded at €910/t, at a slight premium to the spot price.

On screen, February traded at as high as €925/t, albeit for one lot, the equivalent of just 20t. March traded at €910/t and April at €905/t.

Sentiment in the European physical market has, somewhat strangely, strengthened in the past two days, after the European Commission said it would not impose provisional duties on Russian and Turkish hot-dip galvanised material. Subsequently, Turkish re-rollers started to buy more HRC, and mills in the country have already reduced supply because of interrupted gas flows from Iran.

Sellers into Turkey, such as India and Black Sea producers, pushed up their offers in response to brisker demand. Some import offers were made at as high as $850-875/t cfr Turkey. This further buoyed European sentiment.

A Russian mill has returned to market and made some sales at €840-850/t fca but said it will raise prices again next week with only a limited allocation for sale.

Europe's market leader, ArcelorMittal, is likely to announce a €40-50/t increase on HRC this week or early next week.

At the same time, local producers were still trying to find buyers for stranded tonnes not being consumed by the automotive sector, and apparent demand remained comparatively low.

By Colin Richardson