Final Thoughts

February 4, 2015

For some reason, we made an error when setting up this newsletter yesterday evening that stopped it from being published. We apologize for the delay in getting it to you.

Earlier this week ferrous scrap pricing in Detroit settled at down $100 per gross ton on prime grades of scrap such as #1 busheling and bundles. Other grades of scrap were reported to have fallen by $80 per ton. The $80 to $100 drop is much higher than the $30 to $50 forecast a few weeks ago and even the $70 per gross ton which was being discussed one week ago. We will report on the Midwest numbers in Sunday evening’s edition.

Thursday evening is normally when we publish our HRC Futures article. I spoke with Andre Marshall this evening and we decided that there is so much happening in the markets right now – both physical and futures that it deserves more attention. We will have a special extended version of our HRC and BUS (scrap) futures article in Sunday evening’s edition.

In the meantime, I had dinner with the president of a Midwest based service center earlier this week. One of the things we discussed was the desire by some of the OEM’s dealing with his company to lock in long term fixed pricing at today’s levels. We discussed the challenges and opportunities associated with using the hot rolled futures market. I imagine there are quite a few end users and service centers who are looking at the possibility of sub $500 hot rolled coming soon and wanting to lock in their costs and aren’t sure how to accomplish what they want. I spoke with Andre Marshall of Crunch Risk, LLC about this and we would be willing to put together a special workshop on the subject if there is enough interest.

If you, or your company has an interest in learning more about how to use HRC Futures, Swaps and options trading as a way of holding long term fixed pricing (or protecting margins), please contact me and we will see if there is enough interest to hold a special workshop. You can reach me at: John@SteelMarketUpdate.com.

To our Premium level members we should have our Survey Results posted on our website on Friday morning. We should also have a special Premium Supplement issue of SMU out to our Premium clients tomorrow.

As always your business is truly appreciated by all of us here at Steel Market Update.

John Packard, Publisher