Futures
Iron Ore, Scrap Futures Face Uncertainties
Written by Bradley Clark
September 5, 2013
TSI Iron Ore: Prices Stay Firm, Future Is Uncertain…
After breaking through the psychological ceiling of $140/ ton a couple of weeks ago, the iron ore spot market has retreated ever so slightly to $137. While this is not necessarily an indication of a reversal in the pricing trend, it may shed light on some cracks in the markets strength to move higher in the short term.
The futures market remains backwardated with Q4 trading around $130 and calendar ’14 at $117, traders continue to price in a fall in prices. Freight rates continue strengthen which is supporting the delivered China price for ore and demand from mills seems healthy so a significant drop in iron ore prices is not a fore gone conclusion but the market today does feel a bit toppy at these levels.
Volumes on SGX remain very strong.
U.S. Midwest #1 Busheling Ferrous Scrap (AMM) Lack of Activity Prevails
The busheling futures contract continues to struggle with liquidity as the market continues to experience low volatility. No trades have been reported the past couple of weeks and values down the curve remain unchanged with Q4 at $390, Q1 $385 and calendar Q4 $390. With the physical market looking like it will come in down $10-15 on busheling, to $395-400 the curve continues to flatten out.
It seems that the lack of volatility over the past few months has thrown cold water on the impetus for physical users to enter the futures market.
Again, there have been no reported trades this past week.
Bradley Clark
Read more from Bradley ClarkLatest in Futures
HR futures: Shifting risk profiles, emerging opportunities
Summer is here, and a familiar sentiment has hit the hot-rolled coil (HRC) futures market. Prices continue to decline in both the spot market and the futures market, with expectations of sub-$800 prices for the remainder of the year.
HR futures complex slips from June
The CME steel futures complex saw a slight decrease in activity from levels seen at the end of June. This has coincided with a notable decline in flat prices for the nearby futures contract, now August HRC, which is lower by $81 per short ton (st) since last writing on June 13. It settled at $672/st on July 17.
HR futures: Bottom to prices?
A month ago, when we last presented this column, there was a surprising amount of optimism in the presumably imminent reversal of the downtrend in hot-rolled steel prices in the second half of this year.
HR futures: ‘Gimme Shelter’
This chart of the rolling second-month CME hot-rolled coil (HRC) future dating back to the start of 2022 has been as volatile as a herd of “Wild Horses.”
HR futures: Market changes gears
For the first time in weeks, activity in the futures market broke out of the recent “front grinds lower” pattern to provide new insight into the dynamics of the steel industry.