Strong Week for Ferrous Futures

The following article on the hot rolled coil (HRC) 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.

This week, China announced plans to close all illegal substandard steel production by the end of this June.  According to Macquarie research, “industry estimates suggest total capacity from this type of furnace is as high as 110-120 million tons per year, although their capacity utilization is generally low, only 30-50% last year.”  Iron ore futures have rallied to new short-term highs with February SGX (Singapore Exchange) futures closing at $78.25/t.