Futures
HR futures: Activity muted amid quiet spot market
Written by Mark Novakovich
April 25, 2024
Week-over-week trading activity in US steel derivatives markets was relatively muted, with prices maintaining their downward direction since the beginning of the month.
Bids have materialized at the lower end of this range in the May, as the nearby backwardation continues to roll on – just as we saw with April being a premium over May.
There are fewer sellers appearing up front, however, while June simultaneously comes under pressure as the sell-side interest deepens there.
The May 24 CME HRC closed lower from last Thursday provisionally by $7 per short ton (st) at $812/st on April 25, and was down nearly 13% on the month.
Open interest in the CME HRC dropped following the expiration of the April contract, which settled at $841/st. Daily trade volumes were also below recent averages, and down notably from Q1’24.
A sideways CRU print did little to inform or guide the market in either direction. The weekly Nucor offer number provides some additional price transparency. But the market appears unsure of how to digest the information.
Many commercial participants remain sidelined with little appetite on longer term positioning, while financial interests are primarily on the offer side of the market. Scrap paper activity has been especially quiet as well, and physical scrap participants have also cited a quiet spot market. But some are expecting activity to pick up in coming weeks.
Disclaimer: The content of this article is for informational purposes only. The views in this article do not represent financial services or advice. Any opinion expressed should not be treated as a specific inducement to make a particular investment or follow a particular strategy. Views and forecasts expressed are as of date indicated. They are subject to change without notice, may not come to be, and do not represent a recommendation or offer of any particular security, strategy or investment. Strategies mentioned may not be suitable for you. You must make an independent decision regarding investments or strategies mentioned in this article. It is recommended you consider your own particular circumstances and seek the advice from a financial professional before taking action in financial markets.
Mark Novakovich
Read more from Mark NovakovichLatest in Futures
HRC futures: Still waiting for clarity
“One thing we know for certain, however, is that when we write our next column, things will have certainly shaken loose.” – Daniel Doderer, April 4, 2024. Above is a good reminder that whenever someone is “certain” of anything, you should probably look at that line of thinking with a healthy dose of skepticism.
HRC futures: Consolidation ahead of a big move?
It has been a crazy 2024 so far for hot-rolled coil (HRC) futures!!!
HRC futures: A lot of change lurks beneath the surface
It has been six weeks since Flack Global Metals wrote our last SMU column, and if you simply look at the futures curve from then (blue) until now (white), you could argue that very little has changed.
Mark Novakovich joins Crunch Risk, Jack Marshall retiring
Jack Marshall, a beloved member of the Crunch Risk team, has decided to retire. Jack started his career on the CME floor in 1983, working as a clerk. He then became part of the Chicago origination/trading team in forex at Bank of America, where he worked for 23 years.