Futures
Iron Ore and Scrap Futures
Written by John Packard
September 12, 2013
Iron Ore
The spot price is still $135/MT zone with the forward curve still in a healthy backwardation. Most expect Iron Ore to retrace, difference of opinion lies in whether it will see a big sell off or a modest one. The recent positive economic data out of China along with not terrible inventory levels at mills and more modest production rates have likely stalled any decline in Iron Ore as the market waits to see if this might be the beginning of a growth trend. However, rebar prices are declining at a time when demand should be decent and this has some worried for where rebar prices go in China so go all ferrous markets. This story should sort itself out in the pretty near future. Let’s Call Oct ’13 either side of $129.50/MT, Q4 ’13 either side of $127/MT, Q1 ’14 either side of $125.50/MT and Cal ’14 either side of $116.50/MT. Markets are all down about $0.50-1.00/MT in the week.
Scrap
On the domestic front, the September levels were off more than expected with Shred down $15-20/GT in many zones and Bush down $10/GT in the MW to print the AMM Index for September at $400.07/GT. Export interest remains quiet and provides little support and expectations are that scrap will be under further pressure in October as the mix of production swings back away from EAF as BOF problems resolve.
On the export front, the market is quiet as demand from Turkish mills is non-existent for now. Their demand picture is not good with turmoil in Egypt and Syria causing disruptions in various markets in MENA. Scrap inventories by some had also been built up in anticipation of better demand that didn’t materialize. The CFR index is now down to $368/MT. There continues to be no real bid interest on the futures contract. The situation for the world scrap market is not expected to improve as these demand factors prevail, Russia supply is likely to increase, and currency rates keep buying channels localized.
John Packard
Read more from John PackardLatest in Futures
HR futures: Support fails as market slows ahead of election
After a relatively stable and boring September, CME hot-rolled coil (HRC) futures have been on the move lower thus far in October. Since Sept. 30, the November and December futures have declined $63 and $65, respectively, with the curve’s contango steepening.
CRU: Open interest in December HR futures contract surges
CRU Principal Analyst Josh Spoores shares insight into the hot-rolled coil futures market.
HR futures: How many ways to stay the same?
While the English language is vast, there is not an endless number of ways to say, “no major changes have transpired.” And if anyone has been tasked with talking about steel price changes in physical and futures US domestic steel market over the last four months, they are probably stretching their ability to its limit.
CRU: HRC futures market prices in rosy Q4’24 and 2025
CRU Principal Analyst Josh Spoores shares with SMU his analysis of the hot-rolled coil futures market.
HR futures: Higher on news of Cliffs furnace idling
It had been a relatively quiet and steady CME HRC futures market since the end of August. That was upended by Thursday’s news that instead of a two-week maintenance outage, Cleveland-Cliffs would hot idle the C-6 blast furnace at its Cleveland Works for an uncertain period of time. The CME October HRC contract, HRCV4, gained $22 per short ton (st) on the day to provisionally close at $744/st on Thursday. The first and second quarter futures strips of 2025 gained $25/st and $24/st to provisionally settle at $823/st and $829/st, respectively.