Prices
May 22, 2014
Hot Rolled Futures: Prices Breakdown…
Written by Bradley Clark
The past couple of weeks have been a bit brutal for the US hot rolled coil (HRC) forward curve. While the spot market is appearing to run out of steam the HRC forward curve has broken down particularly the second half 2014 periods and calendar 2015 periods. May and June have withstood this recent selling onslaught maintaining recent trading ranges of $675-$685. Q3 and Q4 have not fared as well having traded down to a low of $625, Q4 $623 and cal 15 $625.
It must be said that while softening raw material prices for domestic scrap and global iron ore have taken a hit the past month, in order for calendar 2015 to trade much lower a would take a structural breakdown in the domestic US HR market. That occurrence seems quite unlikely given the potential for further domestic production consolidation, strengthening US economy and geopolitical upheaval taking out a major foreign source of HRC into the US.
