• Skip to main content

    Prices

    October 3, 2013

    Hot Rolled Futures Strengthen Amid Further Price Hikes…

    Written by Bradley Clark

    After weeks and months of a sideways market, the recent mill price hike announcements have been the spark the futures market needed to ignite trading activity. Over 8,000 tons have traded the past few days as the potential for the physical market to move higher has squeezed shorts causing them to cover and for speculators to try and pick off the last remaining sharp offers.  This combination of short covering and speculating has sent all periods down the curve up by $10-20.

    November and December values are approaching $640, Q1 close to $645 and cal 14 to $630. This renewed optimism might need to be taken with a grain of salt as demand follow through has yet to really come back into the market in full force. As tends to happen with futures market, prices have seemingly over shot a bit to the upside as those in the physical market remain cautious prices are set to appreciate very much higher from here.  Time will tell, busheling is trading sideways and other raw materials are flat.   
    Whichever the way the market moves from here is yet to be seen, can the recent price hikes push prices higher, will the lack of improving demand cap how high prices go, will raw materials remain strong going into the end of the year?.  These questions will need to be answered before clarity of direction returns. Either way this renewed trading interest in the futures market is a welcome turn of events after such a quiet second half of the summer.
    Open interest has decreased by around 2000 lots to 12,788 indicating that some market participants have exited the market.

    Bradley Clark

    Read more from Bradley Clark

    Latest in Prices

    HR Futures: Basic story remains, but curve shifts

    In my last column, the HRC futures curve was pricing a sizable premium on near-term tightness while still pointing toward eventual normalization. Since then, that basic story has remained intact, but the shape of the curve has shifted meaningfully. Rather than simply moving higher and pushing the peak out by another month, as has largely been the pattern throughout this rally, the curve is now pricing a more pronounced and prolonged period of tightness, while the long end has remained relatively anchored, which previously had also been lifted with the rest of the curve.

    galvalume steel coil

    SMU Survey: Mill willingness to negotiate price at lowest levels since 2021

    The majority of steel buyers responding to our latest market survey reported that mills continue to hold a firm grip on prices. The share of buyers reporting that mills were negotiable fell this week to the lowest rate seen in over five years. Every two weeks, SMU surveys service center and manufacturer buyers asking if mills are negotiable on new spot sheet and plate orders. In this week’s survey, just 3% of respondents said mills were willing to talk price to secure an order (Figure 1). This is down 11 percentage points from our mid-October survey.

    SMU Price Ranges: Sheet and plate up, buyers see strength into ’27

    Sheet and plate prices continued to press higher this week as the current supply squeeze shows no signs of letting up even as contract season winds down and lead times tip into 2027. The historic rally marks a sharp reversal from last year, when the consensus was that prices would drift lower on uneven demand and new capacity. Steel buyers said it remains difficult to find a domestic mill with spot availability in a market that some said is tighter than in 2021, even if prices haven't spiraled as high as they did then. SMU's price assessment for spot hot-rolled (HR) coil stands at...

    Nucor increases spot HR coil by $15/ton

    Nucor said on Monday, Oct. 26, that its consumer spot price (CSP) for hot-rolled (HR) coil will be $1,270 per short ton (st) this week, up $15/st from the prior week. The CSP for HR coil from California Steel Industries (CSI) on the West Coast will be $1,340/st, up $20/st from last week. Nucor continues to offer lead times of three to five weeks, according to its letter to customers. You can track mill price announcements on our website. Steel Market Update (SMU) published a weekly price assessment on Tuesday, Oct. 20, showing HR coil prices averaging $1,290/st, up $10/st from the previous week. We will update our prices on the evening of Tuesday, Oct. 27.

    Final Thoughts: Is the steel market now tighter than in 2021?

    "Now, the problem is no longer the price. The problem is having access to steel." That would have made a good lead. But I can’t take credit for it. Those (very quotable) words are from Cleveland-Cliffs Chairman and CEO Lourenco Goncalves during the steelmaker’s quarterly earnings conference call on Monday. For a while, I thought the shortages we'd been hearing about might be mostly a problem for small- and mid-sized buyers. But we’re seeing even some of the biggest steel buyers talking openly about supply problems.