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Market Movers Europe


Market Movers - Europe, Aug 14-18: Chinese galvanized steel hit by anti-dumping duty

With Caroline Knight, Editor, Refined Products, Europe

August 14, 2017 08:33:03 EST (3:09)

In the European steel market, participants will be digesting the European Commission’s move to impose provisional anti-dumping duties on China over imports of corrosion-resistant coated steel. China is Europe’s largest steel supplier.


Meanwhile, in petrochemicals, concerns persist about supply disruptions. Last week, prices of PET, the component used to make items such as plastic drinks bottles, surged by 10%. In European distillates, traders are seeing little incentive in buying to store as the market structure swings between contango and backwardation.


Finally, in the natural gas market, Dutch grid operator Gasunie is set to decide this month on whether to expand the TTF market area in the Netherlands to include the BBL pipeline to the UK.


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Video Transcript


In this week’s highlights: steel markets weigh the impact of anti-dumping measures; concerns persist over petchems supplies; and market participants eye backwardation in European distillates.


In the European steel market, participants will be digesting the European Commission’s move to impose provisional anti-dumping duties on China over imports of corrosion-resistant coated steel. China is Europe’s largest steel supplier.


The duties of 17.2 to 28.5% apply to a number of companies, including those in the table here. The long-anticipated measures have seen traders buying steel in advance, resulting in a near 50% year-on-year increase in European imports from China over the first half of 2017. Traders have been searching for new providers to fill the void, but few expect volumes to be fully replaced.


Our social media question this week is: ‘Will alternative steel suppliers be able to plug the gap left by Chinese firms?’ Tweet us your thoughts using the hashtag #PlattsMM.


In petrochemicals, concerns persist about supply disruptions. Last week, prices of PET, the component used to make items such as plastic drinks bottles, surged by 10%. The supply concerns, unusual for the time of year, follow a force majeure at Lotte Chemicals' plant at Wilton, northeast England, and reports of supply issues elsewhere.


European distillates traders are seeing little incentive in buying to store as the market structure swings between contango – whereby prices are higher further out -- and backwardation – which sees the reverse.


Stocks of diesel, jet fuel and gasoil in the Amsterdam-Rotterdam-Antwerp and Ghent hubs fell 6.6% last week as the backwardated market encouraged traders to sell out of tank. But with summer demand slowing, many expect the structure to move closer to contango.


Uncertainty persists however, with a steep backwardation on the Low Sulfur Gasoil Futures contracts from October to December leaving many traders wondering whether the market will be living hand to mouth for some time yet amid the threat of being left with surplus product in a market where storing doesn’t pay.


Finally, in the gas market, Dutch grid operator Gasunie is set to decide this month on whether to expand the TTF market area in the Netherlands to include the BBL pipeline to the UK. The move would create a single market link between Europe's two main gas hubs, TTF and NBP. It would also make the BBL pipeline more economic.


Under the proposals, the Julianadorp point at the entrance to the BBL would be removed. This means shippers would no longer have to book capacity at that point, resulting in an overall reduction of around 21% in shipping costs from TTF to NBP over the expensive winter months and a saving of around 5% in the summer.


That’s all from Platts Market Movers this week. Thanks for kicking off your Monday with us and have a great week ahead.





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