Hot Rolled Futures: Now What?

SMU contributor Tim Stevenson is a partner at Metal Edge Partners, a firm engaged in Risk Management and Strategic Advisory. In this role, he and his firm design and execute risk management strategies for clients along with providing process and analytical support. In Tim’s previous role, he was a Director at Cargill Risk Management, and prior to that led the derivative trading efforts within the North American Cargill Metals business. You can learn more about Metal Edge at www.metaledgepartners.com. Tim can be reached at Tim@metaledgepartners.com for queries/comments/questions.

HRC futures have been continuing to move up over the past week, but less violently than in the recent past. The chart below shows the curve in 2021, and prices in most months rose $10-30/ton from last week. The market has been faced with continuing supply issues from the U.S. mills and a lack of available imports. Buyers have been stuck between a rock and a hard place trying to secure enough steel to keep their lines running and customers with enough material.