Futures
HRC Futures Soften in Uncertain Market
Written by Bradley Clark
January 23, 2014
The market has taken a decidedly bearish tone this week as many feel the first cracks in the physical market are starting to appear. While prices have come off around $5 down the forward curve, the weight is strongly on the offer side, with few buyers present.
The threat of imports and decreasing raw material costs alongside deteriorating macroeconomic sentiment appears to be the major drivers to this bearish sentiment. With that said the spot market remains fairly buoyant as prices continue to remain steady between $665-$675 / st. Whether the market is set for a prolonged pull back or merely wobbles from current levels before stabilizing again has market participants divided. What seems clearer is that any upward momentum has dissipated for the time being.
Volumes in the futures market this week remain anemic as many market participants remain on the sideline. With buyers spooked in an already backwardated market, sellers have yet to become so aggressive as to hit these low bids. As was seen last year, when the spot market falls to levels even sub $600 / st, deferred futures periods remained relatively supported. So with the current shape of the curve so discounted to spot, q4 trading around $628, there seems little potential to short the curve. All of this is transpiring to sap the market of an impetus to trade. While spot sentiment appears to be weakening, the forward curve is actually looking a bit cheap, this may be the time to buy deferred periods at the lowest levels in a year.
The physical market remains steady with prices trading around $670 per ton.
Below is the forward curve updated through Wednesday’s figures and includes what the forward curve was four weeks prior. This provides our readers with some perspective as to how the market is trending during this time period. To view the HRC (and BUS) forward curve you will need to be logged into our website. You can click on the Read Full Text at the top of this newsletter or access the article directly through the website. if you need help logging into the website please contact us at: info@SteelMarketUpdate.com or by phone: 800-432-3475 and we will assist you in the process.
{amchart id=”73″ HRC Futures Forward Curve}
Bradley Clark
Read more from Bradley ClarkLatest in Futures
HR Futures: Meaningful rally grips market
Another eventful week in the physical and financial steel markets is coming to a close. Most importantly, this week provided complete clarity that, after months of waiting for a catalyst, we are now definitively in the early stages of a meaningful rally. The 3rd month future (currently the April contract) rose more than 8% for […]
HRC and scrap futures: Markets pop on hot steel and tariff headlines
It’s been an event-filled month in US ferrous derivatives markets since my last column for SMU. There’s been no shortage of writings and musing about the ongoing steel and aluminum tariffs proposed by the Trump administration. And steel and scrap futures markets have responded accordingly. CME HRC futures prices have risen, and the curve has firmed. The February 2025 HRC futures contract, now in the pricing period, has added $47 per short ton (st) since its contact lows on Jan. 20 to settle at $767/st today.
HR Futures: What’s next for HRC and busheling prices?
Since the publication of our last market update on Dec. 10, several notable developments have shaped the landscape
HR Futures: Awaiting Trump’s 25% tariff
Midwest HRC indices have been stuck in a tight range since last summer with the weekly CRU Midwest HRC price spending the past 32 weeks between $656 and $714 per short ton (st). The rolling Midwest HRC future has been rangebound between roughly $650 to $800 since last June. The rate at which the price of HRC futures move over a certain period or “volatility” has compressed dramatically over the past few months.
HR Futures: Market coiled and ready to move in 2025?
The last six months have been littered with uncertainty and mixed signals, a choppy and rangebound market. Spot indices have largely held steady, despite the pressure from domestic mills pushing for higher prices on spot tons. This has provided a signal of a lack of upward momentum and little downside room based on mill costs. […]