Futures
Ferrous Futures Pause
Written by David Feldstein
June 28, 2018
The following article on the hot rolled coil (HRC) futures market was written by David Feldstein. As the Flack Global Metals Director of Risk Management, Dave is an active participant in the hot rolled futures market, and we believe he provides insightful commentary and trading ideas to our readers. Besides writing futures articles for Steel Market Update, Dave produces articles that our readers may find interesting under the heading “The Feldstein” on the Flack Global Metals website, www.FlackGlobalMetals.com. Note that Steel Market Update does not take any positions on HRC or scrap trading, and any recommendations made by David Feldstein are his opinions and not those of SMU. We recommend that anyone interested in trading steel futures enlist the help of a licensed broker or bank.
Despite the extensive media frenzy around trade and tariffs this week, futures prices have been little changed. Since the CME Midwest HRC futures rallied following the Trump administration’s removal of tariff exclusions for Canada, Europe and Mexico on May 31, the market has taken a breather with July trading at $907, down $10/st this week. Trade volume has plummeted with the Steel Success Strategies conference in New York this week, as well as the upcoming holiday week.
July CME Midwest HRC Future
As prices have moved slightly lower over the last month, the shape of the curve has seen little change. The curve continues to maintain its downward slope with Q4 trading around $835/st and Q1 around $800.
CME Midwest HRC Futures Curve
The July LME Turkish scrap future settled today at $354/mt, down $1.00 on the week.
2nd Month Rolling LME Turkish Scrap Future
The LME Turkish scrap futures curve (left) continues to be downward sloping, similar to the iron ore futures curve, while the CME busheling futures curve is mostly flat starting in July.
LME Turkish Scrap (left) & CME #1 Busheling (right) Futures Curves
The 2nd month rolling SGX iron ore future continues to track the line from the uptrend that started in early 2016 after ore bottomed just below $40/mt. The trading range continues to tighten.
2nd Month Rolling SGX Iron Ore Future
The SGX iron ore futures curve has flattened dramatically over the past month, with the back of the curve moving higher.
SGX Iron Ore Futures Curve
David Feldstein
Read more from David FeldsteinLatest 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. […]