Hot Rolled Futures: All But HR

The S&P has retraced from its new highs back to that same support line which tested again today and just held. We are last 2081.50 on the June future. My guess is we rally from this level and spring to up toward 21875 zone. Meanwhile commodities have had a nice rally. Crude has had a continued steady rally last $59.79/bbl on the June future. Basis the chart it looks like we are headed to test the long term resistance level currently around $72.50/bbl. and probably closer to $70/bbl by the time we reach it. Meanwhile base metals have made a big move as confidence builds around China as the stock market there has had quite a rally of late. In Copper, we are last $2.8750/lb. on the July future, on our way to take out the recent high at $2.8950/lb set on March 23rd. We have seen similar rallies in other base metals and energy.

Steel:

We are still dealing with lower spot prints with CRU down again $4/ST to $442/ST. We have traded 1,295 lots of steel futures in the week or 25,900 Short Tons. We have seen the forwards rise again except for the nearby months, with May down $3 and June down $5. Q3 has traded up $5-10/ST @ $510-515/ST, and Q4 has traded up $3-6/ST @ $516-519 range. We have seen more further 2016 interest as well with Calendar ’16 trading last at $547/ST along with some sporadic $549/ST trades May, August and September. We expect there will be more to activity in 2016 in the coming weeks with both buyers and sellers interested in the period.

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}

Iron Ore:

So much for the rally off the low from last week looking real. With the market reaching as high as $58/MT June future on Friday and now we are back as low as $53.25 traded. The nearbys dropped $4 on Monday and another $2 overnight on Tuesday.  Not expecting a lot of movement this week though with Dalian closed Friday night and LME off Monday for May day. Take a day off people, you deserve it, that’s some crazy volatility in Iron Ore. Let’s call May either side of $54/MT, with June either side of $53/MT, Q3 either side of $50.50/MT, Q4 either side of $49.75/MT, Q1 either side of $49.25/MT and Cal ’16 either side of $48.25/MT.

Scrap:

CFR Turkey continues to hold steady at $271/MT, and despite gloomy rumors scrap here should be sideways to, in aggregate, slightly up. Shred clearly the driver here on price movement . This will coincide with mills needing units on the back of better orders after the price increase this week. That has caused buyers to come off the fence. We have had a little activity of late in BUS futures as well. We traded this week 2H ’15 @ $258/GT. This is the 2nd trade in the past month and further interests are appearing in the scrap futures to hedge exposures.

Another one of our interactive graphs is below with the BUS (CME Busheling Scrap) forward curve.

{amchart id=”74″ BUS Futures Forward Curve}