Johnson: Last Week in HRC Futures

Last week was a short one for US HRC futures, but overall volumes were surprisingly strong given the holiday, as traders were eager to start the year. We see this is a good sign, and we will soon have our annual roundup and breakdown of volumes and open interest in 2022 compared to years past, so stay tuned for that.

Nearby months, which do remain impacted by the lackluster print that ended December, were kept on track last week by a strong uptick on the spot market assessment from $664 to $692. Many of the daily indices are leading higher than this now in the $720-$740/ton range, which seems more reflective of current mill offers than anything else, as spot deals have not been as robust as hoped, though they do seem to have improved with the new year (the price reflects this, of course, up $28/ton week over week and likely up again this week). These are not the $40/ton moves the market was once pricing in recently, but the market does have some apparent momentum to the upside. The question is now can mills keep that momentum going? And for how long?