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    Market Segment

    September 7, 2023

    HRC Futures: Uneven Trading Before the Storm

    Written by Jack Marshall

    The hot rolled (HR) forward curve has rebounded following the Labor Day weekend. The index this week surprised a few folks as it barely slid double figures and remains above $750 per short ton (ST). Lots of rumored lower prices for larger volume deals did not get reflected in the index. While the markets remain somewhat more muted with the looming United Auto Workers (UAW) deadline, futures volumes have begun to pick up this week as some hedgers took advantage of the lower futures prices.

    October futures traded as low as $675/ST before retracing back above $700/ST. Forecast difficulty remains an issue and is reflected in lower open interest in the longer dated months: 85% of the open interest falls in nearby six months. Q4’23 HR and Q1’24 HR quarters have been more active as folks position around the turn. On a settlement basis, Q4’23 dropped to $706/ST on Sept. 5 and settled today at $734/ST, reflecting the sentiment shift. Next week should be more active with the deadline met.

    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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