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    February 22, 2024

    HRC futures: 'Normalcy' not seen on near-term horizon

    Written by Daniel Doderer & Sean Kessler

    Over my years of observing the steel market, there’s been a recurring belief that current market disruptions in either the physical spot market or steel futures are temporary anomalies, destined to fade, and that normalcy will soon return. However, the events of the first few weeks of 2024 served as a stark reminder that this expectation seldom materializes, and that the US steel market is still the most volatile steel market in the world.

    In the beginning of the year, the spot physical market and futures market were firmly above $1,100 per short ton (st) for the second time in the previous 12 months. Steel mills were full of optimism and vigor, announcing successive hikes and pushing out lead times. However, enthusiasm was short lived as the futures market experienced a sharp and sudden decline, catching many participants and observers off guard. Futures prices plummeted through the psychologically significant threshold of $1,000/st and periodically found support at $900, giving the market a moment to digest what just happened.

    Daniel Doderer

    Daniel is an Independent Industrial Economist, focused specifically on the steel industry since 2018. He can be reached with questions, thoughts, and feedback at dmdoderer@gmail.com.

    Read more from Daniel Doderer

    Sean Kessler

    Read more from Sean Kessler

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