Steel Products

HR Futures: Forward curve shifts lower, structure maintains

Written by Joshua Toney

August 21, 2025

Scraping lower-quartile $800s on nearby futures is bringing limited trading ideas for CME hot-rolled coil (HRC) at present. 

The Nucor Consumer Spot Price (CSP) moved down $10 per short ton (st) this week to $865/st. CRU posted at $832/st this week a -$6/st drop week over week. The Index justifies the weakness in Sep’25 futures pricing, and we are witnessing marginal carry expansion with the step lower in front-end pricing. 

I’d diagnose this as structural heading into annual contract negotiations at the end of Q4’25. The market loves to keep some semblance of contango. This writer will be curious to see if there are further price action drivers from Cleveland-Cliff’s three-year supply contracts and if last week’s 1.4% decline reported by the American Iron and Steel Institute (AISI) in raw steel output begins a new trend.

Source: CME

Mill margins imply tightening into Q1’26, which aligns with potential seasonal scrap tightness and inventory declines for end-of-year return on asset calculations. The implication today is that busheling forward velocity is stronger than HRC, which I find difficult to mesh in the current HRC environment of reduced lead times and limited saving grace for exports of ferrous scrap. 

CME BCH and HRC-BCH

Source: CME

Market Positioning (CFTC Commitment of Traders):

As of Aug. 12, CFTC reporting, physical participants added 16,940 st to their short positioning.  Long positioning grew by 26,500 st.  Managed money is sitting net short and added 4,720/st to shorts. Swap dealers are positioned long and added 7,100 st to that net position. Other recordables are roughly balanced. 

Source: CFTC Disaggregated Commitments of Traders – Futures Only, Aug. 12, 2025

Disclaimer:

Joshua Toney

Joshua Toney brings nearly a decade of experience across the ferrous supply chain to this column. He began his career in the physical markets with The David J. Joseph Company (a Nucor subsidiary), trading scrap and metallics across the US. He later helped build out the ferrous derivatives desk at Freight Investor Services (FIS) and most recently led North American ferrous derivatives trading at Marex. Today, he is the Principal of Corsair Elements LLC, an independent research and advisory firm focused on ferrous market intelligence and risk management strategies. His background spans physical and derivative markets, offering readers a unique, integrated perspective on HRC pricing, market structure, and risk transfer in the steel value chain.

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