Futures
Hot Rolled Futures Trading Up 465%
Written by John Packard
November 4, 2013
The increased uncertainty over future hot rolled coil pricing has elevated interest in HRC futures.
Based on CME Group data there were 8,033 hot rolled futures contracts during the month of October for a total of 160,660 net tons. This represents a 51 percent increase over the 5,301 contracts (106,020 tons) during October 2012. During the month of September there were 1,728 contracts (34,560 tons) so the October tonnage represented a 465 percent increase over the previous month.
Year to date (2013) there have been 47,294 contracts (945,880 tons) compared to the 38,622 contracts (772,440 tons) during the same time period one year ago. So far this year we are seeing a 22 percent increase in the number of contracts.
Year over year HRC open interest increased by 11.3 percent. HRC October 2013 open interest ended the month with 14,982 contracts vs. October 2012 open interest of 13,459 contracts. Month on month HRC open interest rose by 14.3 percent from the prior month (September ended with open interest of 13,103 contracts).
The higher open interest represents either new or increased participation in the futures market.
Prices on HRC futures moved higher during the month of October. Prices moved up an average of $15 per month for the first 12 forward contract months, and over $21 for the nearest 3 forward contract months.
The number 1 busheling futures contract (BUS) did not trade any contracts for the month of October 2013. Open interest at month’s end stood at 254 contracts as compared to open interest of 381 contracts at the end of the month of September. November and December futures closing settlements have moved from $385 per gross ton at the beginning of October to $420 per gross ton by month’s end.
John Packard
Read more from John PackardLatest in Futures
HR Futures: Correction in market after big rally
Another eventful week in the physical and financial steel markets is coming to a close, but with a markedly different tone than the last update at the end of February.
HR Futures: Market drifts lower on light volume
Over the past couple of weeks, Midwest HRC futures have been drifting lower on light volume. This begs the question if the rally has run out of steam, or is it catching its breath after ripping roughly $150 in less than two weeks? The April CME Midwest HRC future made an intraday high at $976 […]
HR Futures: Uncertainty hangs over the steel market
Uncertainty has remained a dominant theme in the US ferrous derivatives markets over the past month. And the Trump administration's tariffs on steel and aluminum are still top of mind for market participants.
HR Futures: Major trade developments lift the ferrous complex
Headline risk has returned to the ferrous complex, with both hot-rolled coil (HRC) and busheling ferrous scrap (BCH) markets surging in response to fresh trade restrictions.
HR Futures: Midwest ferrous futures consolidate gains, market anxiously awaits next move
Four weeks have passed since the last article from Rock Trading Advisors on January 30. The paint has dried, and Midwest HRC futures have exploded higher in response to President Trump’s declaration of impending 25% tariffs on all imported steel products. The rolling 2nd month CME Midwest HRC future erupted through the top end of its downtrend, one that dates back to the peak of the winter 2022 rally. It also broke out of its narrow range seen dating back to June of last year.