Prices
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.
