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    Market Segment

    August 31, 2023

    HRC Futures: Uncertain Times Reflect Muted Forward Curves

    Written by Jack Marshall

    Spot hot rolled (HR) prices continued their gradual decent, losing almost $100 per short ton (ST) in August. Interestingly the front month HR (Sep’23) futures are just $38/ST lower than the latest index ($729/ST vs. $767/ST).

    Activity in futures has been somewhat muted as many hedging participants have remained on the sidelines. Some of this could just be that it is summer, but forward looking there are quite a few headwinds giving hedgers cause for caution. The most recent Current Steel Buyers Sentiment survey by SMU is at its lowest point this year at +55. The Federal Reserve’s stance on Interest rates is still up in the air, suggesting liquidity could remain tight for some time. A potential strike by the United Auto Workers (UAW) union in September raises a lot of concerns on top of some sizeable scheduled maintenance outages at a number of mills. 

    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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