EU HRC: Northwest price jumps on talk of another rise
Northwest European hot-rolled coil (HRC) prices continued to firm today, as a leading steelmaker was informing customers of another potential offer increase to €520/t ex-works base.
Argus' domestic northwest Europe index jumped by €6.25/t today to €449.25/t ex-works, taking the monthly average to €441.50/t. The February and March forwards were assessed at €460/t and €467.50/t, respectively.
An offer for Russian material was heard at €455/t free on truck Antwerp, including duty, by far the most competitive quote for overseas material. Asian cold-rolled coil has been offered at €540/t cfr Antwerp for February-March shipment, but bids are substantially lower at €510/t cfr. A trader recently sold Turkish HRC into Spain at around €470-475/t cfr, S235 base.
Most domestic northwest European mills have hiked offers to the €480-500/t ex-works base range, although some are still withholding quotations to try and ascertain how much they should increase. Most northern mills see bids firming, with stockholders increasingly convinced that the uptrend has substance. One trader recently bought high-grade Asian HRC at $520/t cfr (€467/t) for the European market.
There is still some concern about sheet prices in Germany, however, particularly in the south. While some decoilers are trying to hike sales prices, others seem keen to turn material into cash and as a result are selling below replacement cost. This is likely because they have lower priced coil in stock ordered at the nadir of the market in November, but it is still something of a constraining factor.
One northwest European producer may also still be hungrier for volume than some of its competitors, though it did announce a €50-60/t hike earlier this week.
The Italian market appears to be stabilising, with service centres concerned about paying much more with sheet prices not rising and demand weak. Argus' daily index nudged up by €1.25/t today to €439.75/t ex-works.
Serbian HRC was offered into Italy at €465-470/t delivered, at parity to or slightly above domestic levels.
Opinions varied on market direction. Some traders were offloading their positions given lethargic demand, the downturn in scrap prices into Turkey and a perceived greater eagerness to sell from the country's mills. But others still said that offers were €490/t cfr and above, and expected domestic prices to strengthen given the firm global situation and rising northwest European prices. Slab prices also look set to increase in the next round of buying, which could underpin coil.
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Chile outlines plan to double lithium production
Chile outlines plan to double lithium production
Santiago, 27 March (Argus) — Chile will use three different business models to expand its lithium production that it estimates could increase by 70pc by 2030 and 100pc over the next decade, finance minister Mario Marcel said. Chile is the world's second-largest lithium producer with an estimated output in 2023 of 234,000 tonnes of lithium carbonate equivalent (LCE), according to US Geological Survey data. The first model announced late on Tuesday envisages public-private alliances, with the state holding a majority share, in two salt lakes that have been defined as strategic: Atacama in the Antofagasta region and Maricunga in the Atacama region. Public-private alliances will also be promoted in five other salt lakes — covering Pedernales and the Alto Andino project area — where the state will seek the "best agreement" to develop projects with private partners, giving it either a majority or minority role. The third model gives the private sector leadership in the development of 26 other salt lakes in which associations may be formed with state companies but will not be a requisite, said Marcel. Private investors will be asked to submit Requests for Information (RFI) to express interest in these salt lakes in April and the RFI results announced in July. Subsequent tender processes will lead to special lithium operating contracts (CEOL). "During this government, we will sign a group of CEOLs in which the private sector will lead production in which the state will not be a major partner," said economy minster Nicolas Grau. Another 38 salt lakes will be defined as protected areas where development cannot take place to meet Chile's commitments under the Convention of Biological Diversity. Chile has the world's largest proven reserves of lithium but laws passed in the 1970s and 1980s restricted its access to private developers. Chilean SQM and US Albemarle, the country's only producers, operate in the Atacama salt lake under leases with state development agency Corfo. The plan comes almost a year after President Gabriel Boric announced Chile's intention to open lithium mining to private investment in April 2023 as part of its national lithium strategy. By Emily Russell Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Baltimore bridge collapse forces freight changes
Baltimore bridge collapse forces freight changes
Washington, 26 March (Argus) — Vessel traffic in and out of the Port of Baltimore, Maryland, has been suspended indefinitely in the wake of a container ship collision early today that brought down the Francis Scott Key Bridge, an accident that will force the rerouting of coal, car and light truck shipments. The prolonged closure of one of the largest ports on the US east coast could have a ripple effect on trade flows across much of the US, as shippers grapple for alternatives in the absence of a certain reopening timeline. Search and rescue efforts are still ongoing in the Patapsco River, after the 116,851dwt Dali headed to Colombo, Sri Lanka, slammed into a bridge support. The crew had lost control of the vessel. The Dali is owned by Grace Ocean and managed by Synergy Marine Group. The Maryland Port Administration said it does not know how long it will take for the shipping channel to be cleared and for traffic to resume. Shipping companies are bracing for a closure of at least two weeks, but many expect the clean-up effort could take significantly longer. President Joe Biden vowed the federal government will provide whatever resources are needed to get the port "up and running again as soon as possible." The port is a major trade hub for steam and coking coal, automobiles and scrap metal. Many market sources are still trying to determine whether the disruption will be dramatic enough to move prices. But coal markets were already being affected today. Baltimore is home to two key coal export terminals: eastern US railroad CSX's Curtis Bay Coal Piers and coal producer Consol Energy's Consol Marine Terminal. The facilities are upstream of the bridge, meaning ships will not be able to serve them until the route reopens. The terminals handle thermal and coking coal from Northern and Central Appalachia. They have a combined export capacity of 34mn short tons (30.8mn metric tonnes). The two terminals loaded 2.4mn t of coal in February, up from 2.1mn t a year earlier, according to analytics firm Kpler, mostly exports to India and China. An India-based trader said that the suspension of coal exports will probably raise prices in India, as brick kilns enter the peak production season in the summer. Buyers could look to petroleum coke as a substitute, but the higher sulphur content may not be appealing to some users despite the higher calorific value. Prices for deliveries to northern Europe are also likely to rise given that the Netherlands, Germany and Belgium combined are the second-largest market for North Appalachian coal. April API 2 futures rose by $2/t to $113.30/t. The incident has added a "level of volatility [which] could have big implications," a European paper broker said. The lack of information has prompted some coal producers to hold off on activating force majeure clauses in their contracts. Curtis Bay is served only by CSX, while CSX and fellow eastern carrier Norfolk Southern serve Consol. CSX said it is in contact with existing coal customers and contingency plans are being implemented. The railroad at this point intends to keep Curtis Bay open but will continue to assess the circumstances moving forward. Norfolk Southern did not respond to questions. Some scheduled Baltimore coal exports may be redirected to the other three eastern US coal export terminals in Hampton Roads, Virginia, but such reroutings likely will entail increased costs. Not all coal mines will be able to shift terminals. Such decisions will depend on available capacity in Hampton Roads. Exports from the three terminals in January reached a five-year high , signaling somewhat limited capacity. Mine location and railroad access may also determine whether coal can be rerouted, an industry source said. But some producers do not have much of a choice about trying to send coal to Hampton Roads. They may need the cash so will be forced into a decision. The producers most vulnerable to delays may be Consol and Arch Resources. Arch's Leer coking coal mine may be in the best position because it co-owns Dominion Terminal Associates in Hampton Roads with Alpha Metallurgical Coal Resources. The sudden lack of export capacity could put a floor under US coal prices, which have mostly been falling since last year amid low domestic demand. The competition to replace Baltimore coal exports could prevent further cuts, another coal trading source said. Metals sources say the accident will have only isolated effects on the global ferrous scrap market, but many market participants are still assessing the situation. The port is the 10th largest ferrous scrap export port in the US, and over the last five years an average of 44,000 metric tonnes/month of ferrous scrap was exported from Baltimore, according to US Department of Commerce data. But the port closure is likely to affect other freight. Baltimore is the nation's top handler of automobile traffic. Motor vehicles and parts accounted for about 42pc of all Baltimore port imports and 27pc of all exports, according to state data. The Port of Baltimore handled 847,158 cars and light trucks in 2023. "It's too early to say what impact this incident will have on the auto business — but there will certainly be a disruption," said John Bozzella, chief executive of industry trade group Alliance for Automotive Innovation. Dry bulk freight rates likely unaffected Several sources told Argus Baltimore's closure is unlikely to have a major impact on dry freight rates despite short-term interruptions to coal transports. "We are in the shoulder months with less demand for thermal coal," a shipbroker said, suggesting mild global temperatures means the collapse "may not have too much of an impact" on freight markets overall. Vessel traffic in ports such as Charleston, South Carolina, and Savannah, Georgia, may increase on diversions from Baltimore. Kpler identified 17 vessels that will likely be impacted because they are either in the Port of Baltimore or were expected to load there in the coming days. By Abby Caplan, Gabriel Squitieri, Luis Gronda, Evan Millard and Brad MacAulay Port of Baltimore coal terminals Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Global scrap impact limited after US bridge collapse
Global scrap impact limited after US bridge collapse
Pittsburgh, 26 March (Argus) — The collapse of a major bridge in Baltimore, Maryland, this morning should have isolated effects on the global ferrous scrap market, but market participants are still assessing the situation. A container vessel hit the Francis Scott Key bridge, an artery for the Port of Baltimore. The bridge subsequently collapsed, blocking all vessel traffic in and out of the port and triggering major rescue and recovery efforts. The Port of Baltimore told Argus that the port is still operating and processing trucks inside its terminals but that all incoming and outgoing vessel traffic is suspended until further notice. Market participants said a resumption of activity could take up to a few weeks as rescue efforts, cleanup, investigations and draft assessments take place. As a result, it is unclear how long the port will be able to keep taking inbound truck traffic in the short-term because of space limitations. The collapse and temporary suspension of vessels so far will likely have an isolated effect on the ferrous scrap market. The Port of Baltimore is the 10th largest ferrous scrap export port in the US and over the last five years a monthly average 44,000 metric tonnes (t) of ferrous scrap were exported from the Port, according to US Department of Commerce data. In 2023, the port shipped 486,000t of ferrous scrap with bulk shipments to Turkey accounting for most of the volumes at 314,000t or 67pc of total shipments. One bulk vessel was shipped to Mexico in November. The remaining ferrous scrap exports from the port are containerized exports with south Asia the major destination. In 2023, the shipments to India represented 16pc of the volumes, while Pakistan was 6pc. There are currently no bulk vessels loading at the Port, according to Argus vessel tracking. Maryland-based Baltimore Scrap, which was acquired by global metal recycler Sims Metal in 2023 is the primary bulk exporter from the port. Smith Industries also ships bulk vessels from Sparrows Point, Maryland, which is a few miles south of the Francis Scott Key bridge. Although the global market effect is somewhat limited, market participants said that with the indefinite loss of the Francis Scott Key bridge trucking logistics moving scrap metal to the Port will be severely affected until the corridor is reestablished. Others noted congestion concerns at other major mid-Atlantic ports as inbound vessels are likely to be diverted and any inland container depot shipments scheduled to ship out of Baltimore are rerouted to other ports. This could cause congestion at surrounding ports including, but not limited to: Norfolk, Virginia; Newark, New Jersey; and Philadelphia, Pennsylvania. By Brad MacAulay Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Chinese Cisa steel mills cut output in mid-March
Chinese Cisa steel mills cut output in mid-March
Beijing, 26 March (Argus) — China Iron and Steel Association (Cisa) member mills cut crude steel output by 0.51pc from 1-10 March to 2.048mn t/d over 11-20 March because of weaker steel demand and rising inventories. Output fell by 9.12pc from a year earlier during 11-20 March. Daily pig iron output fell by 0.42pc from 1-10 March to 1.836mn t/d for 11-20 March and was down by 6.56pc from a year earlier. Daily finished steel output rose by 1.95pc from 1-10 March to 1.965mn t/d for 11-20 March but was down by 8.05pc from a year earlier. Cisa reported its members' steel inventories at 19.533mn t over 11-20 March, rising by 0.05pc from 1-10 March and up by 3.04pc on the previous year. Cisa data include information from more than 100 of the country's largest steel mills. China's spring season demand was weaker than market participants' expectation with inventories continuing to rise after the lunar new year in late February. Market participants estimate that Chinese trading firms and mills' steel inventories rose by around 2mn t from early March to mid-March because of weaker consumption from the construction industry. Steel prices showed a downwards trend in early March and mid-March. Shanghai rebar ex-warehouse price assessed by Argus fell by 200 yuan/t ($28/t) or 5.4pc from 1 March to Yn3,530/t on 20 March. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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