Futures
HRC Futures Prices Showing signs of Support…
Written by Bradley Clark
June 19, 2014
The HRC futures market has been stuck in a rut over the past couple of weeks in terms of both volumes and price volatility. The market remains backwardated with the spot price now at 670 and the July futures value around 650, Q3 630 and Q4 630. While prices in the physical market have softened slightly over the past couple of weeks, some buying support on nearby futures has started to creep back into the market, as some traders are starting to view the July contract as too discounted to spot as we are only 2 weeks away from that period.
In the physical market their is starting to be a clear division between those who believe the current global sell off in raw materials and increased exports of Chinese material into the global market makes the US set to pull back significantly. On the other hand their are those who believe the political turmoil in the black sea, and thus the lack of new shipments out of Russia plus the greater mill discipline after this years recent domestic consolidation has conspired to keep prices buoyant in the face of global steel weakness.
Time will tell how things will play out. For now however the futures market remains eerily quiet despite this divergent of market opinions.
Volumes have been very thin this week and last, with less than 5,000 tons trading.
In the white space below is an interactive graph on the hot rolled futures forward curve. The graph can only be seen when reading the newsletter on our website.
{amchart id=”73″ HRC Futures Forward Curve}
U.S. Midwest #1 Busheling Ferrous Scrap (AMM) Market Quiet
The scrap market came in virtually unchanged in June and while it is too soon to say where July will end up, the global raw materials situation may damper any upside moves. With that said their has been renewed interest in the paper market with bids coming in down the curve between 385-395. Sellers are a bit more scarce as little in the market are eager to sell below spot far forward. Trading has been non existent the past few weeks but their has been more traders looking to put trades on despite of none being concluded.
The second of our interactive graphics – this time showing the busheling scrap forward curve. If you are looking at white space its because you need to read the newsletter on the website… Need help? We are here to do just that – contact us at 800-432-3475 or by email: info@SteelMarketUpdate.com.
{amchart id=”74″ BUS Futures Forward Curve}
Bradley Clark
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