HR Futures: Rangebound amid muted summer trade

At the same time, the spread between Dec’25and Dec’26 HRC futures has only appreciated by $5/st and there is currently a $22/st difference between the two (see chart below).

This structure hasn’t generated a lot of trade interest. However, some participants are now speculating that the fourth quarter of this year could get heavier as fundamentals remain weak and forward commercial activity remains muted.

Open Interest (OI) in the CME HRC contract is unfortunately also at multi-year lows, with just 420,000 st open across all calendar months, nearly half of what OI was back in April. After the March 2026 position, open interest is especially thin, and daily traded volumes in futures have exceeded 20,000 st just four days in the past month.

Weighing on sentiment, some service centers have recently reported seeing prompt tonnages available from mills around $800-$820/st, while one trader even said he’s heard some trades just below that.

OEM demand is said also to be largely on the sidelines, with physical buying continuing to be mostly hand-to-mouth. Some traders are saying that this is unlikely to change until after the SMU Summit later this month.

Busheling futures

On a brighter note, the CME’s No. 1 Chicago busheling scrap futures (BCH) contract has shown some signs of life. Rumors of a potential tariff on Brazilian pig iron brought some fresh interest off the sidelines into the market in mid-July, and trade participants have remained engaged since then.

There’s also been some market chatter about some “scrap plus” deals getting booked, so that has also helped to get the CME BCH futures contract to the highest levels of open interest since its launch back in January. Open interest is now at 75,000 gross tons (gt) total.

Prices have appreciated since lows seen in April, around $440/gt for the Dec’25 contract just after the Liberation Day tariff announcements. They’ve gone up to $480/gt currently. Forward interest in/around Cal’26 has been around the $490-500/gt level.

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