Hot Rolled Coil Futures Trade Sideways...

The hot rolled coil (HRC) futures market has been trading sideways over the past couple of weeks, taking cues from the physical market that looks to have slowed its ascent.  Trading volumes have been fairly average, with traders and hedgers seemingly more comfortable on the sidelines until a new catalyst sparks the market to break one way or the other.   The nearby periods remain strong, with May and June trading between $670-680. The back end is trading in strong backwardation as prices are moving in a substantial discount to spot and nearby months, with Q3 and Q4 trading around $630-635.  This market structure suggests many view the recent surge in steel prices to peak in June before retracing throughout the summer and fall.  Whether this will materialize is still very uncertain. It seems that another price hike is around the corner and pent up demand is still beginning to take hold as spring becomes summer.

Volumes have been strong the past week with over 10,000 tons trading.