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    March 9, 2023

    HR Futures, Spot Prices Move Higher As Lead Times Extend

    Written by Jack Marshall

    What a difference a month makes in light of a difficult forecast environment for hot rolled (HR) prices. The mills have been raising HR spot prices faster than folks can track, and the futures appear to be in lockstep as lead times continue to extend. While steel capacity utilization rate seems stuck in the mid-70% range, HR production at a number of mills appears to be fairly robust. This suggests that demand is stronger than expected and even as supply is healthy.

    The latest HR index pushed HR over $1,000/short ton (ST), but that is still lagging the latest $1,150/ST HR spot price being offered for spot from a number of the mills. Open interest in HR futures are starting to push higher in the last few days as new entrants put on positions/hedges. As of Thursday, open interest in HR was 26,550 lots, which is up from 24,250 lots just the previous Friday.  

    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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