Hot Rolled Futures Trade Calendar Year 2013
Apr / 13 / 2012 - Hot Rolled Futures Trade Calendar Year 2013
Written by: Andre Marshall, CrunchRisk LLC
HR NYMEX
The week continued on its stronger footing in the 2012 months. We traded Q3 end the prior week, and it traded again end last week ending up at 692. Jun/Sep also traded at that same level end week. This week we traded Cal ’13 @ $695 and Jun/Sep traded again at $692. So the curve has now flattened out completely from June 2012 through December 2013. Volume improved as well with a total of 1178 lots having traded or 23,560 ST. As the price hikes by the mills have encouraged the spot price to stop its slide and even to rise slightly, they have also encouraged some buyers to move here on the forwards. Selling interest continues at this current forward curve of $695.
LME Billet
A very static market with little activity. The spot is still just under $500 at $497 and the 3 months at $514. The 3 months range today was $509-514. Despite continued appetite from the Turks on scrap, albeit as static levels, there appears to be little price inflation of positive sentiment in the long products market for Asian/Mid-East markets.
Feedstock
Iron Ore has climbed steadily during the week with a $1/T increase here and 50 ct/Ton increase there. Except for one day it seemed like Iron Ore made gains daily. The front end now trading either side of $148/Ton. The forward curve shape is the same as last week for most part, but just a few dollars higher. All that said, the spot physical business in China is still dead, the Iron Ore inventory remains massive, and this rally appears driven by market trading optimism that the Chinese government will have to enact some sort of quantitative easing in the near term. Whether there is a QE by their govt. or not one could expect at some point a reaction retracement to this optimism driven market action.
Scrap meanwhile is all over the place and showing no signs of conviction in either direction. Prices for both primary and secondary ranged from flat to 20 down depending on location and quality from March levels with Primes under greater pressure than obsolete. There has been a lot of discussion about how the different regions of the country have very different sentiment in steel and this holds true for scrap as well. Let’s call dlvd MW prime scrap at about $445-460/GT. Further it appears that some dealers may be holding back on releasing units expecting May and or June to be higher than April. This is not a bullish data point if the case. With the lack of conviction one would think that typical seasonal effects will prevail in the end.
