Futures
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Hot Rolled Futures: Almost Time to Wake Up…
Written by David Feldstein
September 1, 2016
The following article on the hot rolled coil (HRC), busheling scrap (BUS), and financial futures markets was written by David Feldstein. As Flack Steel’s director of risk management, Dave is an active participant in the hot rolled coil (HRC) futures market and we believe he will provide insightful commentary and trading ideas to our readers. Besides writing Futures articles for Steel Market Update, Dave produces articles that our readers may find interesting under the heading “The Feldstein” on the Flack Steel website www.FlackSteel.com.
CME Midwest HRC futures limped toward Labor Day with not much trading (excluding one large 5kt/m Q4 trade last Friday) and not much price movement. Excluding September, the curve has flattened around $530/st through December of 2017. 19,160 short tons have traded hands since last Thursday. Open interest is currently at 401,300 st.
A strong bull case and a strong bear case could be made at this point, however today’s dreadful ISM PMI and disappointing auto sales are starting to concern this guy that the weakness on the demand side is more than a buyer’s strike and summer doldrums. A good 500 people from the steel industry were in Atlanta this week for the SMU conference while another lot was taking advantage of the last week of summer. Purchase orders were probably few and far between.
The bottom line is the weeks following Labor Day will tell us a ton about what we can expect for the rest of 2016 and as this information is fleshed out, it may lead to some palatable volatility in the futures. I can tell you for sure HRC prices will either go up, stay flat or head lower.
Below are the trades executed since last Thursday:
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David Feldstein
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HR futures: Shifting risk profiles, emerging opportunities
Summer is here, and a familiar sentiment has hit the hot-rolled coil (HRC) futures market. Prices continue to decline in both the spot market and the futures market, with expectations of sub-$800 prices for the remainder of the year.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/09/HRC-Futures.png)
HR futures complex slips from June
The CME steel futures complex saw a slight decrease in activity from levels seen at the end of June. This has coincided with a notable decline in flat prices for the nearby futures contract, now August HRC, which is lower by $81 per short ton (st) since last writing on June 13. It settled at $672/st on July 17.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/09/HRC-Futures.png)
HR futures: Bottom to prices?
A month ago, when we last presented this column, there was a surprising amount of optimism in the presumably imminent reversal of the downtrend in hot-rolled steel prices in the second half of this year.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/09/HRC-Futures.png)
HR futures: ‘Gimme Shelter’
This chart of the rolling second-month CME hot-rolled coil (HRC) future dating back to the start of 2022 has been as volatile as a herd of “Wild Horses.”
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/09/HRC-Futures.png)
HR futures: Market changes gears
For the first time in weeks, activity in the futures market broke out of the recent “front grinds lower” pattern to provide new insight into the dynamics of the steel industry.