Steel Products Prices North America
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/ad27dc034aa9e1155d836b765b7dfc8e.jpg)
HR Futures in Limbo as Risk Managers Await More Data Points
Written by Jack Marshall
December 8, 2022
The following article on the hot-rolled coil (HRC), scrap and financial futures markets was written by Jack Marshall of Crunch Risk LLC. Here is how Jack saw trading over the past week:
Hot Rolled
Over the last month, HR index prices have continued to decline, but at a much slower pace. The most recent index for HR came in just under $620 per short ton (ST).
Between the decelerating spot price declines and a price increase by mills since our last piece, it might even be argued the spot physical market has found a floor, at least temporarily.
The question is will this hold and will HR prices push much higher? HR price momentum surveys are neutral, which is likely due to weak economic data reports.
Going into the end of the calendar year generally generates some buzz for the upcoming opening quarter for the new year. However, market sentiment has focused on weaker-than-expected demand, reflected in soft manufacturing data. The weak demand is shrinking forecasting horizons, creating further uncertainty.
For a point of reference, year-to-date 2022 the monthly index average for HR is a shade over $1,050/ST. Except for the prior year, which was the exception, the annual monthly average for 2018, 2019, and 2020 was $830/ST, $601/ST and $577/ST, respectively.
November open interest was only slightly higher than October, with the average volume day just under 18,000 ST/day. For the period Wednesday, Nov. 16, through Wednesday, Dec. 7, the HR spot index has declined $38/ST consecutively. With the mill price announced HR spot price increase, the street will be expecting a trend change in price.
The focus will be on whether the current market demand will support the full mill price increases and help push spot back up to $700/ST.
Over the last four Wednesdays the HR futures curve has become less steep for the Cal’23 futures period. Q1’23 average prices have pushed higher, and Q4’23 average prices have declined similar amounts. The Jan’23 to Dec’23 settlement price rise has decreased from +$96/ST ($704/ST to $800/ST) to +$67/ST ($713/ST to $780/ST).
Below is a graph showing the history of the CME Group HR futures forward curve. You will need to view the graph on our website to use its interactive features. You can do so by clicking here. If you need assistance with either logging in or navigating the website, please contact us at info@SteelMarketUpdate.com.
Scrap
A strong surge in 80/20 export scrap prices over the last few weeks on the order of $40/ton is reportedly behind strong demand for BUS going into the December settlement. Some regions have already reported, lending credence to the expectation that BUS prices will likely rise by $20/$30 per GT for December. November 2022 BUS settled at $359.62/GT.
Additional factors also helping to support higher prime prices include:
– Higher energy prices
– Reduced supply of obsolete grades
– Cyclical annual December-January push to build inventories for the new year.
Settlement prices between Nov. 16 and Dec. 7 reflect a $24/GT increase in Q1’23 average BUS price, while the Q4’23 average price reflects a roughly $6/GT decline. The average price for Cal’23 BUS on a settlement basis is just $6/GT higher over the four Wednesdays.
Below is another graph showing the history of the CME Group busheling scrap futures forward curve. You will need to view the graph on our website to use its interactive features. You can do so by clicking here.
By Jack Marshall of Crunch Risk LLC
![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 Steel Products Prices North America
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/07/CRU-Logo-2023-07-21-at-4.35.41-PM.png)
CRU: Longs pricing trends diverge in North, South America
Most longs prices in the US were unchanged this month, except for rebar, which declined by $1.50/cwt ($30/short ton) m/m. While end-use demand is stable, inventories are well-stocked, keeping purchases limited. Domestic availability is sufficient to meet current demand, hindering the appetite for imported material. Meanwhile, prices for scrap remained under pressure in June, with […]
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor cuts plate prices by $125/ton, cites ongoing competition
Nucor Corp. announced that its plate mill group would cut prices for as-rolled, discrete, and normalized plate with the opening of its August order book.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor cuts HR price for fourth straight week
Nucor lowered its consumer spot price (CSP) for hot-rolled (HR) coil by another $10 per short ton (st) for the first week of July. The steelmaker said in a letter to customers on Monday that its CSP base price for the week will be $670/st for all of its sheet mills with the exception of California Steel Industries (CSI).
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Cliffs_logo2.2.png)
Cliffs sets $720/ton HR price with opening of August books
Cleveland-Cliffs on Tuesday announced its monthly hot-rolled (HR) coil price of $720 per short ton (st) with the official opening of its August order book. The rate is down from last month’s price of $800/st.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/07/CRU-Logo-2023-07-21-at-4.35.41-PM.png)
CRU: Demand weakness continues to weigh on global sheet markets
Demand has remained persistently weak across the globe for sheet steel, weighing on prices. US HR coil prices fell the furthest this week as high-volume, low-priced deals were transacted as mills looked to fill order books and competed with one another amid relative demand weakness. Meanwhile, European prices were also down due to low demand […]