Hot Rolled Futures Markets Grinding Higher

The following HRC and BUS futures market trading article was written by Jack Marshall of Crunch Risk, LLC. Here is how Jack and Andre Marshall saw trading this week and what the forward curve looks like:

HR futures continue to grind higher. While HR demand seems to be holding steady we are starting to see some structural shifts in supply which have really helped give HR futures a bid tone lately. This week the anti-dumping duty announcements by the  Commerce Department have re-enforced the expectations of import supply disruptions from record high import levels. We are seeing lengthening HR lead times, further HR price increase announcements for plate & sheet, modest inventory levels, and rising scrap exports from historically low levels due to quickly rising prices. The combination of all these dueling supply drivers along with announced integrated mill closings and falling capacity utilization rates appear to be slowly shifting sentiment in the HR space. The one caveat to this more bullish view could be the fickle price of iron ore, which gave back much of its recent price gains.  Oh yes,  and there is that extra 100 million tons of excess capacity Chinese steel!