HR Futures: Low-key market despite Trump tariffs

Some commercial traders have said that the rally remains fragile, given end-users’ uncertainty regarding the tariffs’ impacts on supply, demand, and general economic activity. Others have noted that futures values should remain buoyed as the Trump administration is focused on supporting US-based producers. 

Daily traded volumes have averaged around 20,000 st over the past 30-day period. But Open Interest across the complex never regained the recent highs seen at the end of March. At that time there was 825,000 st open in the CME HRC futures. Currently, there is approximately 680,000 st open as of yesterday’s close, but minimal interest beyond the Aug’25 position.

The front end of the futures curve remains supported, however. And the backwardation structure marches forward, with the May’25 to Dec’25 HRC futures spread widening from a low seen on April 11 at $19/st, to settle at $64/st as of close today.

But that is down from the high of $89/st seen on March 18, as demonstrated by the chart below. A short-term focus on nearby shipments, and a lack of forward buying activity from physical participants has prevented the forward part of the futures curve from firming as noticeably as the front.

Busheling futures

Activity in the CME’s Chicago Busheling No.1 scrap (BCH) futures has been virtually non-existent, as the BCH contract has failed to participate in the HRC rally.

The last trade seen in the complex was just 200 st on April 22. Scrap dealers have reported higher values seen in the physical market, but buyers for scrap futures remain few and far between, and bid below levels talked for spot tons.

Total Open Interest hovers around 43,000 gross tons (gt), and the lead May’25 contract has lost $5/gt since last month to settle at $440/gt today.

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