It’s no secret that HRC futures have been particularly volatile over the past several years. The most recent instance was the outsized break in the March futures contract early this week. For companies procuring raw material in anticipation of higher prices or even to get ahead on future purchase orders from customers, understanding the relative price of that raw material versus the hot-rolled coil futures curve is important.
Much discussion has centered on HRC futures and option liquidity. The perceived lack of liquidity is often used as a reason for not engaging in risk management, a profound folly in our opinion. Looking back over the last decade, the futures market has seen increased volume. The HRC futures volume in 2023 was 617% of 2013 numbers.
Last week in Chicago, we hosted several metals companies for our bi-annual Metals Price Management Seminar (“MPMS”).
Several past columns in SMU have included comments about the futures forward curve, using terms like contango and backwardation
If the last few years have taught us anything, it is that nothing is certain.
Hot-rolled coil (HRC) futures prices fell after our last column published Aug. 17, putting in recent lows around $25-$30 per ton lower than the week prior
Over the last month, SMU columns have referenced significant fluctuations in the Hot Rolled Coil Futures market as participants sift through the impact of several events, including some that are yet to be resolved.
In the past two months, the US Midwest Hot Rolled Coil (HRC) futures market has experienced significant fluctuations. The initial decline in prices led to destocking and low inventory levels. However, recent price increase announcements by mills halted the downward trend and even reversed it temporarily.