Futures
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Ferrous Futures Pause
Written by David Feldstein
June 28, 2018
The following article on the hot rolled coil (HRC) futures market was written by David Feldstein. As the Flack Global Metals Director of Risk Management, Dave is an active participant in the hot rolled futures market, and we believe he provides 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 Global Metals website, www.FlackGlobalMetals.com. Note that Steel Market Update does not take any positions on HRC or scrap trading, and any recommendations made by David Feldstein are his opinions and not those of SMU. We recommend that anyone interested in trading steel futures enlist the help of a licensed broker or bank.
Despite the extensive media frenzy around trade and tariffs this week, futures prices have been little changed. Since the CME Midwest HRC futures rallied following the Trump administration’s removal of tariff exclusions for Canada, Europe and Mexico on May 31, the market has taken a breather with July trading at $907, down $10/st this week. Trade volume has plummeted with the Steel Success Strategies conference in New York this week, as well as the upcoming holiday week.
July CME Midwest HRC Future
As prices have moved slightly lower over the last month, the shape of the curve has seen little change. The curve continues to maintain its downward slope with Q4 trading around $835/st and Q1 around $800.
CME Midwest HRC Futures Curve
The July LME Turkish scrap future settled today at $354/mt, down $1.00 on the week.
2nd Month Rolling LME Turkish Scrap Future
The LME Turkish scrap futures curve (left) continues to be downward sloping, similar to the iron ore futures curve, while the CME busheling futures curve is mostly flat starting in July.
LME Turkish Scrap (left) & CME #1 Busheling (right) Futures Curves
The 2nd month rolling SGX iron ore future continues to track the line from the uptrend that started in early 2016 after ore bottomed just below $40/mt. The trading range continues to tighten.
2nd Month Rolling SGX Iron Ore Future
The SGX iron ore futures curve has flattened dramatically over the past month, with the back of the curve moving higher.
SGX Iron Ore Futures Curve
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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.