There is Liquidity in the HR Futures Market
Steel Market Update hosts a Linkedin group called: Steel Market Update. Our group discussions have been very active since we started the group a couple of weeks ago. Discussions include topics such as the Hot Rolled Futures market – is it necessary and is there liquidity? Under what circumstances is it OK for a flat rolled steel buyer to pay more from one supplier than another? We have also discussed the Chinese inventory situation.
The question of liquidity in the hot rolled futures market came up late last week and Andre Marshall, CEO of Crunch Risk, LLC and the instructor for our Hedging Price Risk workshop told SMU in an email this morning:
“None of the participants that use the HR futures market have had serious issues with liquidity. The screen may reflect at times no volume or bid/ask spreads that are $20 wide, however there is always a market through conduits like myself, for instance 2nd Half ’12 right now is $670/675. Doesn’t get any tighter than that.”
We encourage those within the steel industry to sign up for our Linkedin group (must be a Linkedin member first which is free).
We also encourage those exposed to the flat rolled steel industry to learn more about the HR Futures and Options markets and how hedging strategies might be good (or not) for your company. Our next Hedging Price Risk workshop will be held in Chicago on April 11, 2012. You can register online or you can contact our office for more details: email@example.com