Hot Rolled Futures Bounce with Renewed Optimism…

Written by Bradley Clark

With the expected steel price hikes finally coming to fruition the futures market has reacted strongly as offers were lifted and bids take a step up. After months of a down trending physical market sentiment has taken a clear turn to bullishness. The nearby months (March and April) traded to lows around $615 last week before trading sharply higher to $640 and $650 today. The second half of the year has experienced similar strength albeit at a bit more subdued levels with Q3 and Q4 steel trading up from lows of $620 last week to $635. Volumes have been strong with over 20,000 tons trading the past couple of weeks as traders who have previously been on the sidelines have reentered the market to either cover shorts or establish length.

In the physical market it feels that mills have been much more disciplined falling last week’s price hikes. This discipline along with lengthening lead times, a firming scrap market and warming temperatures should conspire to drive prices to the upper range of recent mill offerings around $660 over the next few weeks.

Below is an interactive graph that displays the current HRC futures forward curve as well as a comparison to four weeks ago. For this graphic to load and work correctly, this article must be viewed on our website and you must be logged in.Otherwise, you will only see a blank white space prior to the ferrous scrap details. For help logging in and navigating our website feel free to contact us at 800-432-3475 or by replying to a newsletter email.

{amchart id=”73″ HRC Futures Forward Curve}

U.S. Midwest #1 Busheling Ferrous Scrap (AMM) Prices Set to Rise

The busheling market while quiet with limited volume trading, is nonetheless firming. Several bids have entered the futures market the past week for nearby April and May periods at $370. The physical market remains quiet as it is still too early to call what April will develop into, but early indications are that prices for busheling should rise between $10-20 per ton. With firming finished steel prices, renewed export demand and stronger pricing, should provide solid support for dealers to achieve better prices month on month in April.

Again, there have been no reported trades this past week. Below is an interactive chart on the BUS Futures Forward Curve.

{amchart id=”74″ BUS Futures Forward Curve}

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