HRC Futures: Post Wednesday CRU Print Rally Picks Up Steam

Editor’s note: SMU Contributor David Feldstein is president of Rock Trading Advisors. Rock provides customers attached to the steel industry with commodity price risk management services and market intelligence. RTA is registered with the National Futures Association as a Commodity Trade Advisor. David has over 20 years of professional trading experience and has been active in the ferrous derivatives space since 2012.

Nucor announced a $50-per-ton flat-rolled price increase on Monday, August 8. This chart shows the CME Midwest HRC futures curve settlements on Friday August 5, the day before the increase, and as of Wednesday night. In the days following the announcement, there was a brief, $30-$50/ton burst higher across the futures curve. But there was no follow through, and the rally failed. In the bottom panel, you can see the HRC futures curve had declined $40-$60/ton per month through Wednesday’s settlement. You could say the price increase was ineffective. You could also say the price increase was simply meant to set the floor.