HRC Futures Prices Showing signs of Support…

The HRC futures market has been stuck in a rut over the past couple of weeks in terms of both volumes and price volatility.  The market remains backwardated with the spot price now at 670 and the July futures value around 650, Q3 630 and Q4 630.  While prices in the physical market have softened slightly over the past couple of weeks, some buying support on nearby futures has started to creep back into the market, as some traders are starting to view the July contract as too discounted to spot as we are only 2 weeks away from that period.

In the physical market their is starting to be a clear division between those who believe the current global sell off in raw materials and increased exports of Chinese material into the global market makes the US set to pull back significantly. On the other hand their are those who believe the political turmoil in the black sea, and thus the lack of new shipments out of Russia plus the greater mill discipline after this years recent domestic consolidation has conspired to keep prices buoyant in the face of global steel weakness.