Futures
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/9a21bb51ec2327c00b501a4893b2b096.jpg)
Hot Rolled Futures: Q1 '17 Trades at $625
Written by Jack Marshall
December 1, 2016
The following article on the hot rolled coil (HRC) and financial futures markets was written by Jack Marshall of Crunch Risk LLC. Here is how Jack saw trading over the past week:
Steel
Interesting futures markets in steel lately. Today Q1’17 HR traded at $625/ST, 1,200 ST/mo. Also Jan/Feb’17 HR traded at $625/ST, 500 ST/mo. The market remains $625/ST bid for Q1’17. Balance of year bids are tapering off to $600/ST. Last Cal’17 trade was executed at $615/ST last Friday. Futures volumes this past week totaled 12,380 ST. Open Interest is 17,214 contracts or 344,280 ST.
The velocity of the rise in HR futures prices has left many folks surprised. The swift move higher can be attributed to a lack of selling liquidity. Importers who are typically futures sellers have been quiet because of reduced trade due to higher tariffs. Also natural long physical players have been slow to adopt futures.
Concern that there is still upward momentum and that further supply shortages are possible have motivated buyers to push up HR futures in early 2017 along with the prospect of further mill price increase announcements in the new year. The gap between Dec’16 $562/ST bid and Q1’17 bid at $625/ST is wider than we normally find between Dec and Jan. It has typically been about $30/$35 wide for the turn of the year.
Scrap
In the BUS futures contract we are $280/GT bid for 1H’17 with offers coming in at $300/GT. The spread between the near date LME steel scrap futures and the CME BUS futures has narrowed as the BUS has been pulled higher by the HR futures and natural buying interest and the CFR Turkish scrap has traded off $10/15 in the Dec/Jan’17 period due to stagnant spot and lack of cargoes.
Below are two graphs showing the history of the hot rolled and busheling scrap futures forward curves. You will need to view the graphs on our website to use their interactive features, you can do so by clicking here. If you need assistance with either logging in or navigating the website, please contact our office at 800-432-3475 or info@SteelMarketUpdate.com.
![Jakc Marshall, SMU Contrubutor](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/04/jack-marshall-150x150.jpeg)
Jack Marshall
Read more from Jack MarshallLatest in Futures
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/09/HRC-Futures.png)
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.