HRC Futures: Sellers Take Control of Market

Editor’s note: SMU Contributor Michael D’Angelo is a researcher and trader at Marex. In his role, Mike performs fundamental and quantitative analysis, which directly leads to actionable trading/risk management strategies across the base, precious, and ferrous metals derivative spaces. Prior to joining Marex, Mike received a BA in economics with a minor in finance from Princeton University. Mike can be reached at mdangelo@marex.com for comments/questions.

On Monday morning Cleveland-Cliffs yet again raised flat-roll steel prices by $100 per short ton (st). Since then, the CME April contract is up over $100 to about $1,240. The price hike marked the seventh increase by major steel mills since November. The justification seems to be filled order books and a tightening scrap market. However, many buyers are skeptical that input costs have risen enough to justify these prices, and feel that sellers are trying to extort them. Many are even calling the market a bubble.