HRC Futures: Down, But is There More to Go?"

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.

Throughout this price rally, buyers have kept a keen eye out for data or events that will signal a long-awaited correction. Last week, with the European Union’s suspension of a scheduled June tariff increase on select U.S. imports as a show of good faith to normalizing U.S.-EU trade relations, the futures market seemed to indicate that buyers’ prayers may soon be answered. The below chart shows the change in HRC futures from the day before the EU’s announcement, May 12, to settlements on May 19. The March 2022 contract is down $295/ton.