Executive Summary
USA
1. (From February 26). NORTH AMERICA BILLET ALERT. Over one million tons of offshore billet to be imported into North America in 2019, an all-time record.
Offshore billet imports set to strengthen in 2019 for the fifth-consecutive year. Spot premiums seen under pressure due to oversupply and scrap availability. North America’s offshore billet imports reached an all-time record high in 2019 with at least 955 kmton arriving in the region (United States, Canada, and Mexico) last year. Looking ahead, 2019 North American offshore billet imports are expected to jump to new record levels with total volumes expected to easily surpass 1 million tons due mainly to higher volumes from the Middle East and India the US.
More details in full report.
EUROPE
2. (From February 28). European P1020 premiums firm up but upside seen capped.
Rotterdam premiums get support from wider nearby contangos. Rotterdam premiums have received support from wider nearby LME contangos during February. As a result, HARBOR’s European in-warehouse Rotterdam P1020 ingot duty-paid spot transaction premium increased to a four-month high of $130–$140 per mton from a previous range of $120–$130 per mton. Moreover, HARBOR’s European in-warehouse Rotterdam P1020 ingot duty-unpaid spot transaction premium increased today to a four-month high of $70–$80 per mton from a previous range of $68–$75 per mton.
More details in full report.
3. (From March 1). European Q2 contract volumes still open expected to be closed mainly between $440–$480 per mton. Spot premiums decline across the board.
European Q2 billet contract negotiations continue, with most suppliers already closing the majority of their Q2 books and some extruders in Italy, Poland, Spain, and Portugal still pushing to extend negotiations in an effort to obtain lower quarterly contract
premiums. Looking ahead, we expect Q2 contract volumes still open to be closed generally between $440–$480 per mton as even some Tier 1 suppliers that are still looking to close some business have been recently forced—by regional oversupply—to lower premiums in some cases below $490 per mton in order to capture some market share.
More details in full report.
ASIA
4. (From February 22) P1020 premiums in Asia firm up as expected amid wider nearby LME contangos, new premium level near the high end of sustainable range
HARBOR’s MJP (Main Japanese Ports) CIF P1020 ingot spot transaction premium increased to a nine-month high of $92–$94 per mton, from a previous $70–$85 per mton.
MJP spot premiums have increased from the low end of the estimated long-term equilibrium range of $70-$100 per mton to levels near the high end of this range. Spot premiums in Asia have been recently supported by a widening in nearby LME spot premiums in Asia have received support from wider nearby LME contangos during the past few weeks.
More details in full report.
