Futures
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/a3614f23a282f9d3fcf6885b971140a0.jpg)
Hot Rolled Futures: Prices Begin to Push Higher
Written by Jack Marshall
August 27, 2020
The following article on the hot rolled coil (HRC) steel and financial futures markets was written by Jack Marshall of Crunch Risk LLC. Here is how Jack saw trading over the past week:
In the last month, HR spot prices have had a fairly wide range, trading at least a $40/ST range based on reported indexes. August HR spot settled at $451/ST. August, which can be a rather quiet month for futures hedging transactions, was very active due to the following factors—lead times lengthening, strengthening scrap prices and forecasts for improving prices and demand. This month, lead times pushed out over six weeks at a number of mills, improved demand for scrap pushed prices higher and offer inquiries for HR futures ticked up.
The HR futures market has been very active in both the nearby months and Q4’20 and Q1’21 periods. The volume of futures nearly tripled from July as almost 500,000 ST of steel futures traded, in part due to quite a few calendar spreads being transacted.
The futures curve reflected stronger demand for both Q4’20 and Q1’21, which steepened the contango. During this period, the HR futures curve prices have shifted higher. It is up about $15/ST for the two periods. From one month to 12 months out, the curve prices rise about $45/ST.
Scrap
Expectations for higher HR prices have been reflected in higher prices for BUS as reflected in BUS futures. The futures curve has risen almost $14/GT on average over the last month with Q4’20 BUS futures trading in the $310/GT range. There still exists a wide margin between the latest BUS settle at $258 and spot month futures. Early chatter has BUS futures prices climbing $10-30/GT. Export scrap demand does not show signs of weakening anytime soon, which will support higher BUS prices.
![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.