The ferrous complex was weak on November 18, 2022 as spot, paper and steel fell:
Seaborne coking coal futures have now joined the broadening ferrous crash:
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Readers will know that my base case is ongoing heavy price falls in everything ferrous as China resumes its shuttered 120mt of EAF steel production that was suspended owing to the power crisis derived from coal and gas shortages.
On that front, the news is less rosy for lower prices over the past few days owing to Europe’s fantastic bumbling over gas supply from the eastern tyrants. Goldman from yesterday:
Today’sannouncementby the German regulator that they have halted NS2’s certification process has significantly reduced the chances NS2 comes online before the end of the year. Specifically, the interruption will allow Nord StreamAG time to set up a subsidiary to own and operate the German section of the pipeline. This has increased uncertainty around the timing of Russian supply normalization, sending TTF prices another $4/mmBtu higher to $31/mmBtu, just above our $30/mmBtu 4Q21 forecast.
While the move by the German regulator suggests they could be guiding NordStream AG towards the path of approval for NS2, the timeline for the start of thepipe now appears longer than what we initially expected. As a result, we move our assumed start of NS2 to Feb22.
That has bounced European gas prices:
Landed upon JKM:
And firmed seaborne thermal coal:
Nevertheless, as you can see, these are all very short-term issues so any reprieve for the ferrous complex (if) will be equally brief.