Futures
Hot Rolled Futures: HRC Volume Steady at 10,000 Tons
Written by Bradley Clark
February 26, 2015
Hot rolled prices continued lower this week with the CRU down $9 to $508/ton with HRC futures following suit. Q2 has been trading around $510/ton with March trading as low as $503/ton – $13 lower than the week prior. The second half of 2015 is reasonably higher with Q3 and Q4 both trading around $535/ton. Some think the market is near a bottom, citing the stabilization of lead times recently. Others are more pessimistic, alluding to low oil prices and cheap raw materials costs. The low price of raw materials such as iron ore appears to be the new norm and has given mills much more room to negotiate on pricing.
Oil companies in the U.S. have responded to the recent plunge in oil prices by cutting production. As supply is taken out of the market, oil prices may push higher in the months to come.
Despite slowing growth abroad, the U.S. economy has remained resilient. Housing starts were slightly down in January, but overall conditions in the housing market remain strong. Automotive sales lent support to steel prices last year with over 16 million vehicles sold. 2015 has seen this trend continue so far with a 14 percent increase in sales for January 2015.
Volume has been steady this week with 10,000 tons of HRC being traded so far.
Slowing exports for scrap and low raw material costs have continued to deteriorate scrap prices in the U.S. Scrap has been trading around $250/GT, and may trade sideways to slightly down into March. Scrap prices have struggled to find support the past year, and have steadily trended lower from $400/GT this time last year.
Below is an interactive graph of the HRC Futures Forward Curve. The graph can only be seen when reading this article while logged into our Steel Market Update website:
{amchart id=”73″ HRC Futures Forward Curve}
Another one of our interactive graphs is below with the BUS (CME Busheling Scrap) forward curve.
{amchart id=”74″ BUS 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. […]