Futures

Hot Rolled Futures: Stagnant in a Slow Market

Written by Bradley Clark

September 18, 2014

The hot rolled coil (HRC) futures market has been very flat in terms of pricing over the past few weeks with the Q4 trading around $645, Q1 $650 and calendar 2015 around $645.  All prices are very flat down the curve, indicating a slight decrease in pricing from current spot levels.  Overall, good volumes have been trading the past couple of weeks with over 20,000 tons going through on nearby periods.  This increase in volumes, while positive for liquidity, hasn’t moved prices in either direction, all done at recent trading levels.

The futures market seems to be under the same malaise as the physical market.  While prices remain stable in the physical market, and further domestic consolidation and potential for new trade cases to be filed seem to provide an underlying bullish feel, activity levels remain subdued. It really seems for both the physical and futures market the story of low volatility and thus stable pricing and a stable market is the story of the year and the moment.

Volume has been strong this past week with over 20,000 tons trading.

Below is an interactive graphic depicting the latest hot rolled futures forward curve with a comparison to four weeks ago. The graph can only been seen and interacted with when you are logged into the website and reading this article online (otherwise it just appears to be an empty space on your screen).

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

U.S. Midwest #1 Busheling Ferrous Scrap (AMM) Market Flat

Uncharacteristically for the scrap market prices continue to remain flat.  This month pricing was unchanged from the prior month and all expectations, though early yet, are for another sideways market in October. The futures market remains dormant as the lack of volatility in the underlying market has provided no impetus for hedgers or punters to trade.  Like the finished steel market, the ferrous scrap market this year has been one of stable pricing and consistent flows.

No trades have occurred this past few weeks on the futures market.

Below is another interactive graphic, but for the latest busheling scrap forward curve in comparison to the same curve from four weeks ago.

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

Bradley Clark

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