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    November 17, 2016

    Hot Rolled Futures: Wow! What a Month Makes! Boom!

    Written by Jack Marshall

    The following article on the hot rolled coil (HRC) and financial futures markets was written by Andre and Jack Marshall of Crunch Risk LLC. Here is how Jack saw trading over the past week:

    The bearishness was so thick 1-2 months ago you could cut it with a knife! The steel futures were getting crushed, $480/ST was the low print on Cal ’17, not much different than the spot prints in the $460-465/ST zone. CFR Turkey scrap was sub $200/MT with domestic scrap soon to follow, and demand in the U.S. was dismal (maybe still is for some). My broken record story was that it would surprise and rally! I did know it would rally, I just didn’t know when. I guessed 4th quarter because inventories were/are so low and buyers would need to move at some point, but a turning point in the New Year was not out of the question (markets can remain irrational a lot longer than one can remain solvent). Having traded a Copper book for 6 years, I know from experience why it’s important to be the contrarian (if you want to make money trading price direction anyway). Markets function normally when there are equal buyers and sellers. They function irrationally when there are more participants wanting to buy or sell. If everyone is/was bearish, then there’s no one to buy it and the market drops to levels to find eventual buyers, levels it can’t sustain, and visa versa on the highs. I have experienced moments when I knew intellectually that giving in to the emotion/fear and closing losing positions would result in the market changing direction right afterward (capitulation), and still had to trade it (losses, or fear of more, can make any rational person do things they don’t want to). Markets are cycles, they always will be no matter the story line or the emotion attached to them (Obama/ISIL/Ukraine/Brexit/Putin/Bernie/Trump).

    Jakc Marshall, SMU Contrubutor

    Jack Marshall

    Jack Marshall has over 30 years of experience trading and marketing financial futures and swaps, including currencies. Before joining Crunch Risk in 2012, Marshall was responsible for Forex Origination for BofA Merrill Lynch in their Chicago office. For Crunch Risk, he focuses on Ferrous scrap futures and helps manage client communications. Marshall is a regular contributor to the Steel Market Update newsletter covering topics including steel and steel scrap futures. He is NFA registered Associated Person and holds a Series 3 license. Marshall can be reached at jack.marshall@crunchrisk.com.

    Read more from Jack Marshall

    Latest in Prices

    Nucor ups spot HR coil to $1,295/ton

    Nucor said on Monday, Nov. 9, that its consumer spot price (CSP) for hot-rolled (HR) coil will be $1,295 per short ton (st) this week, up $15/st from the prior week. The CSP for HR coil from California Steel Industries (CSI) on the West Coast will be $1,365/st, also up $15/st from last week. Nucor continues to offer lead times of three to five weeks, according to its letter to customers. You can track mill price announcements on our website. Steel Market Update (SMU) published a weekly price assessment on Tuesday, Nov. 3, showing HR coil prices averaging $1,350/st, up $45/st from the previous week. We will update our prices on the evening of Tuesday, Oct. 10.

    Nucor temporarily halted secondary offers, rattling a tight US market

    Nucor opened its secondary and excess product bid list across all its flat-rolled mills last Monday, as it typically does, market participants told SMU. But by Wednesday, when bidding was scheduled to close, Nucor notified buyers it would not be awarding any bids that week. The abrupt close sent a shock through the secondary market, they said. “There will be no awards this week,” emails from Nucor sales representatives to customers confirmed. “Effective immediately, we are placing a temporary hold on all secondary sales.”

    Sheet prices surge as ’26 market squeeze spills into ’27

    Sheet prices soared this week as market participants increasingly predict that the strong market characterizing 2026 will stretch well into 2027. And with extremely limited spot availability, mills that have spot tons to sell are charging a significant premium, they said. The result: Sheet prices saw their highest week-over-week gains since March 2025, according to SMU's pricing records. That's when President Trump shocked the market by expanding Section 232 tariffs to cover traditional US allies such as Canada, Mexico, and the EU.

    Nucor increases spot HR to $1,280/ton

    Nucor said on Monday, Nov. 2, that its consumer spot price (CSP) for hot-rolled (HR) coil will be $1,280 per short ton (st) this week, up $10/st from last week. The CSP for HR coil from California Steel Industries (CSI) on the West Coast will be $1,350/st, also up $10/st from a week earlier. Nucor continues to offer lead times of three to five weeks, according to its letter to customers. You can track mill price announcements on our website. Steel Market Update published a weekly price assessment on Tuesday, Oct. 27, showing HR coil prices averaging $1,305/st, up $15/st from the previous week.

    HR Futures: Basic story remains, but curve shifts

    In my last column, the HRC futures curve was pricing a sizable premium on near-term tightness while still pointing toward eventual normalization. Since then, that basic story has remained intact, but the shape of the curve has shifted meaningfully. Rather than simply moving higher and pushing the peak out by another month, as has largely been the pattern throughout this rally, the curve is now pricing a more pronounced and prolonged period of tightness, while the long end has remained relatively anchored, which previously had also been lifted with the rest of the curve.