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    Market Segment

    February 16, 2023

    HR Futures Move Higher, Inflation or Demand Driving Price Hikes?

    Written by Jack Marshall

    Inflation indeed!  Hot-rolled (HR) spot indexes have risen about $40 per short ton (ST) since the beginning of February. HR futures settlements for the period between Feb. 1 and Feb. 16 also reflect rising prices. The average weighted price for Q2’23 is up over $108/ST to $902/ST; Q3’23 up $65/ST to $853/ST; and Q4’23 up $32/ST to $822/ST. This is quite a quick shift higher in the HR futures curve. It also reflects the lagging nature of the index to the physical prices available as recent multiple mill price increase announcements have outpaced the index. A number of mills are asking $900/ST for base HR. 

    The HR indexes ended 2022 at roughly $665/ST, and have risen $145/ST as of the latest push to approximately $810/ST. Declining HR imports and still low but improving capacity utilization numbers support the current Mar’23 HR future. This reflects the expectation the mills will get their latest published prices.

    Jakc Marshall, SMU Contrubutor

    Jack Marshall

    Jack Marshall has over 30 years of experience trading and marketing financial futures and swaps, including currencies. Before joining Crunch Risk in 2012, Marshall was responsible for Forex Origination for BofA Merrill Lynch in their Chicago office. For Crunch Risk, he focuses on Ferrous scrap futures and helps manage client communications. Marshall is a regular contributor to the Steel Market Update newsletter covering topics including steel and steel scrap futures. He is NFA registered Associated Person and holds a Series 3 license. Marshall can be reached at jack.marshall@crunchrisk.com.

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