Futures
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/f1f1d7d8a0fe6fa02bc3896f669a2882.jpg)
CRU U.S. Midwest HDG Coil Index to Be Used in Settlement of New CME Futures Contract
Written by Chris Houlden
February 25, 2020
CRU’s U.S. Midwest hot-dipped galvanized (HDG) coil base price index will be used in the settlement of the CME Group’s new cash-settled U.S. Midwest Domestic Steel Premium (CRU) Futures contract. As announced earlier today by CME Group, the contract will settle on the premium of CRU’s HDG coil base price over the established CRU U.S. Midwest HRC index and is due to launch on March 23, 2020.
Having served the market for over 30 years, CRU’s U.S. Midwest HDG coil base price adheres to exactly the same methodology as CRU’s recognized U.S. Midwest HRC price. It is based exclusively on transaction data, is volume-weighted, a balanced representation of buyers and sellers and is overseen by expert industry analysts based in Pittsburgh. CRU has a number of steel and other commodity specialists based here and elsewhere in North America.
Together with the existing CME HRC contract settled on CRU, the U.S. Midwest Domestic Steel Premium (CRU) Futures contract will complement the existing HRC contract to provide the downstream market with an additional price risk management tool. Crucially, it is based on the physical market’s most adopted prices.
“We are delighted to work with CME Group and extend our service to physical and paper markets, building on our established position in the flat-rolled market in North America. Market volatility has not gone away, and we are pleased to support additional risk management tools whilst providing the most trusted and reliable physical prices to the market,” said CRU Head of Prices Development Chris Houlden.
“This new hedging tool for the downstream flat steel market is a welcome additional price risk management tool. It will allow for more precise hedging, benefiting the entire ferrous supply chain,” added Jeremy Flack, founder and CEO of Flack Global Metals.
“Our clients across the ferrous supply chain continue to look for tools to hedge price risk, including for hot-dipped galvanized steel,” said Young-Jin Chang, Global Head of Metals Products, CME Group. “We are pleased to provide the downstream market with a new way to price and manage their exposure to changes to hot-dipped galvanized steel, as we continue to expand our growing ferrous product suite.”
View more CRU steel prices here.
For questions, please get in touch.
Chris Houlden
Read more from Chris HouldenLatest in Futures
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/09/HRC-Futures.png)
HR futures: Trade case action official – It was already priced in?!
This month’s column on the markets could be a response to the question of last month, “Are the forward curve prices on Aug. 7 high enough to price in trade case risks?" The market’s answer has been a pretty resounding YES so far, I think.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/09/HRC-Futures.png)
HR futures: Trying to form a bottom
On Aug. 14, the chairman of the world’s largest steel producer, China’s Baowu Steel Group, had some alarming news. He told staff at the firm’s mid-year meeting that conditions in China are like a “harsh winter” that will be “longer, colder and more difficult to endure than expected.”
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/trading_screen.png)
HR futures: Lack of good news leads futures lower
The front end of CME hot-rolled (HR) coil steel futures contracts had drifted lower when this article was filed on Thursday afternoon. And the back end of 2024 had also come under pressure. Despite staging a late-month rally at the end of July back into the low $700s per short ton (st) range, the lead […]
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/trading_screen.png)
HR futures: Forward premiums remain substantial. Are they substantial enough?
Another month for hot-rolled (HR) coil, and another disappointing one for the bulls. They are still holding onto hope that the bottom is here and still pointing to an imminent uptick in HR prices.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/09/HRC-Futures.png)
HR futures: Trend reversal or bear market head fake?
Cleveland-Cliffs and Nucor each raised their respective hot-rolled coil (HRC) prices this week. Since last Wednesday’s settlement, the Midwest HRC futures curve has rallied as much as $63 in the September future.