Executive Summary
USA
1. (From April 2). US MW P1020 ALERT. MW duty-paid premium down to 16.30-18.05 cent/lb as oversupply bites.
HARBOR’s US MW P1020 Ingot Duty-Paid Consumer-Supplier Spot Transaction Premium weakened considerably today on the low end to 16.30-18.05 cent/lb (which equates to MW journalistic references minus 2.70 to minus 0.95 cent/lb), from a previous 17.65- 18.05 cent/lb. More than 80% of the most recently transacted volume has taken place between the mid-point and the lower end of the current range. Discounts under journalistic references remain wide.
More details in full report.
2. (From April 2). CME MW duty-paid financials for Q2 2019 weaken to 18.60 cent/lb; LME MW financials waiting to gain traction.
Preliminary data indicates that CME MW duty-paid premium financials for Q2 2019 weakened today to a two-week low of 18.60 cent/lb, down 0.10 cent/lb from Friday (when the most recent volume was transacted for this period). Meanwhile, CME MW duty-paid premium financials for H2 2019 quoted at an average of 17.65 cent/lb, down 0.03 cent/lb from yesterday and 0.08 cent/lb from a week ago. US MW Duty-paid financials curves (both CME and LME) continue in a steep backwardation.
More details in full report.
3. (From April 3). US BILLET ALERT. Highest ever offshore billet volumes arrived to US in Q1 2019; US billet demand losing dynamism and uneven among regions.
US offshore billet imports jumped 29% y/y in Q1 to more than 265 kmton, by far the largest volume ever to have entered the US in a quarter. US billet demand is reported as healthy but losing momentum, with growth varying by sub-region. In fact, North American (US and Canada) extrusion shipments were only up 0.7% y/y in the first two months of the year. Looking ahead, we expect the US billet spot premium to remain under pressure in coming months.
More details in full report.
EUROPE
4. (From April 5). EUROPEAN BILLET ALERT. Early Q3 billet contractual deals point to lower quarterly premiums ahead as oversupply lingers. Italian spot premiums weaken further.
Some early Q3 billet contracts have been closed around $420-$430 per mton in Southern Europe, per HARBOR’s market intel from the ground. In our view, this premium level could end up being closer to the high side of the Q3 billet contracts premium range if the ongoing regional billet spot premium decline continues in the coming weeks as a consequence of the European market oversupply. As previously communicated, regional spot and quarterly billet premiums are expected to remain under pressure in coming weeks.
More details in full report.