• Skip to main content

    CRU

    January 18, 2021

    CRU: Vaccine Spring, Second Wave or Fiscal Tsunami—What Will Define 2021?

    Written by Jumana Saleheen

    By CRU Principal Economist Alex Tuckett and Chief Economist Jumana Saleheen from CRU’s Global Economic Outlook

    This month has brought good and bad news. On the one hand, vaccines are being rolled out, and further U.S. fiscal stimulus looks increasingly likely. On the other hand, the growing severity of the second wave of COVID-19 means the path to recovery will be more volatile and less predictable. The net outcome of these contrasting developments is negative for Q1, but positive further out. We have marginally revised up our 2021 forecast for growth in world GDP to 5.2%, and our 2022 forecast from 3.7% to 4.1%. We now forecast growth in world industrial production in 2021 and 2022 of 6.2% and 3.5%.

    Jumana Saleheen

    Read more from Jumana Saleheen

    Latest in CRU

    CRU: Futures contract reaches record open interest as prices rise

    Open interest on CME Group’s hot-rolled (HR) coil futures contract typically builds throughout the month before dropping at the end of the month alongside contract settlement. Analysis in this report is based on an early month view of this open interest as well as prices. Notably, open interest for the HR coil contract is currently at a record high of 849,240 short tons (st) or 42,462 contracts.  Open interest is up 13.8% m/m and 66% higher from the 511,480 st of open interest a year ago. We have found that open interest often rises alongside higher physical prices and that has proven true in this current market environment. Physical prices continue to rise, supported by not only rising demand and domestic production issues, but also on government-restricted imports.

    CRU: HR coil futures re-price 2027 forward curve

    CME Group’s hot-rolled coil futures have jumped higher as the loss of a reheating line at a large Southern mill have renewed domestic production issues. At market close on Oct. 12, the Q4'26 futures are now pricing in $1,295 per short ton (st) for HR coil, a month-over-month (m/m) increase of $63/st. For 2027, the forward curve is up $80 /st vs. September, at $1,207/st. For November 2026 through March 2027, prices are at an average just above $1,300/st.