Futures
Hot Rolled Futures: Another Step Down for HRC Prices
Written by Bradley Clark
March 12, 2015
Steel prices continued their slide this week. The CRU was down $14 to $488/ton, which has put downward pressure on futures contracts for nearby months. April and May are trading approximately $10 lower this week with the former at $495/ton and the latter closer to $510/ton. While nearby months have been influenced by the deteriorating spot price, the second half of the forward curve remains much firmer. Q3 has trades being done around $525-$530/ton, and Q4 recently traded as high as $540/ton.
A bottom has yet to be reached for the steel market as slowing demand in China has hurt a vast amount of commodity prices including iron ore and coking coal. Environmental regulations placed on Chinese steel mills as well as slowing construction in the country have both had a large impact on global demand for iron ore, which is currently at $57/MT. Coking coal has seen a 12 percent slide in prices from this time last year; while not as dramatic as the fall in iron ore prices, this has allowed domestic mills to negotiate contracts well under $500/ton. The bottom of the market remains to be seen, but it gets closer each week as U.S. steel prices become more aligned with the global market.
Volume this week has been quite slow with only 2,000 tons trading so far.
A strong dollar and slowing global demand for scrap has kept U.S. exports as well as the price of ferrous scrap low. Prices are currently around $240/GT, which is approximately $150/GT lower than the same time last year. Prices are likely to remain low until growth in China picks up or a supply disruption limits the amount of scrap in the U.S. market.
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: 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.