The steel futures markets shrugged off news of the earthquake, tsunami, and nuclear disaster this week and closed yesterday a bit firmer. Also, sentiment in the iron ore futures market picked up yesterday. And Domestic U.S. scrap demand is reported to be on firm footing heading into April.

This week the 2011 average HRC price on the CME U.S. Midwest Hot Rolled Coil contract increased $10 per ton from an average of $750 per short ton to $760 per short ton.

But the futures market still seems to be offering some attractive price levels that you or your customers might wish to lock in for July through December of this year.

Below is a table with yesterday’s HRC futures settlement prices on the CME contract for each month in 2011:

CME Contract Month / HRC Settlement Prices. March 16, 2011:

An astute buyer of HRC might think that locking in July HRC at $725 looks interesting compared to today’s spot price of over $900. If you or your customer want to lock in HRC for July through December, you could probably lock that in today at around $720.

It might be a good time to talk to your customers to see if they have interest in fixing a portion of their hot rolled coil prices for the balance of 2011.

LME Billet Prices Unchanged; Reports that Prime Scrap is firming

This week LME billet futures prices again remained unchanged as prices have remained in a tight trading range all month. LME billet cash settlement price yesterday was $545 and has been between $540 and $560 all month long. LME 3-month settled yesterday at $566 near the top of its monthly range of between $550 and $565.

We have heard reports this week that prime scrap in the U.S. is firm and may be heading higher as there seems to be some concerns about adequate supply of prime scrap to meet current mill demands. We have heard prices paid of up $10 per ton for #1 busheling scrap already for April.

We will continue to closely monitor both the LME Billet futures and the prime scrap situation as both have historically been reliable leading indicators as to which way steel prices are headed next.

Written by: Joseph Reinmann, CEO Kataman Metals