• Skip to main content

    Sheet

    September 4, 2025

    HR Futures: Market finds footing on supply-side mechanics

    Written by Gaby Ain

    As Labor Day marks the transition into fall, the steel market enters September with a similar sense of change. Supply-side fundamentals are beginning to show signs of restraint: imports are limited, outages loom, and production is capped, setting the stage for a market that feels steady on the surface but still unsettled underneath. The balance leaves pricing stable for now, yet sensitive to the next shift.

    CME Midwest HRC Futures Curve (9/4 in white, 8/28 in blue, 8/4 in orange)

    A month ago (Aug. 4, orange), the curve carried a modest upward slope, and by late August (one week ago, blue), that optimism had unwound; nearby contracts had corrected by $20-50/ton. Over the past week, the curve has stabilized. September through December maturities have retraced part of the late-August drop, while out months have flattened around $870-880/ton. The shape underscores a balanced tone: mills have regained some near-term traction, but forward markets remain cautious beyond Q1’26. That caution is underscored by the spread to spot, with the CRU Midwest HRC index at just $809/ton. Rather than a reflection of present demand, the premium resembles an effort to establish a structural floor, anchored by mill discipline, tight imports, and the Q4 outage season.

    CME HRC Money-Manager Positioning

    Speculative positioning reinforces the same theme. Managed money length, which peaked at over 10,000 contracts in Q1, has since been liquidated, leaving net positions essentially flat at -294 contracts. With little speculative length left, downside risk from liquidation is limited, but upside momentum is capped until fresh length comes in. Futures strength, therefore, is less about “hot money” and more about underlying fundamentals.

    And fundamentals are beginning to set the stage. Imports have been consistently below the long-run average since February and are trending toward the lowest levels since 2009, closing off external supply pressure. Domestic production remains steady, with capacity utilization just right below 80%. Lead times, after being stagnant for several weeks, are beginning to tick up as mills warn of the outage season. Globally, the narrowing spread between domestic spot and landed prices has curbed import arbitrage, reinforcing support for a floor. On the demand side, however, momentum is lacking. Construction spending has fallen for nine straight months, auto sales remain uneven, and manufacturing still struggles to stay in expansion. These softer demand signals may explain why the back end of the curve has flattened rather than extended higher.

    Looking ahead, the new 50% tariff regime remains a variable yet to be fully tested. Futures have only traded under these conditions during the subdued summer period. The historical seasonal pick-up in activity could provide the first real measure of how much these tariffs have shifted the landscape.

    Taken together, the futures market has corrected, found its footing, and is leaning more on supply-side mechanics than speculative flows or demand growth. For now. As ever in this market, volatility may not be far away.

    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 by Flack Global Metals or Flack Capital Markets should not be treated as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Views and forecasts expressed are as of date indicated, 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.

    Gaby Ain

    Works as an analyst at Flack Global Metals since September 2023, specializing in demand and supply dynamics to provide valuable insights on the steel industry, as well as the economy to support the research used by Flack Capital Markets in driving effective business strategies.

    Read more from Gaby Ain

    Latest in Sheet

    HR Futures: Basic story remains, but curve shifts

    In my last column, the HRC futures curve was pricing a sizable premium on near-term tightness while still pointing toward eventual normalization. Since then, that basic story has remained intact, but the shape of the curve has shifted meaningfully. Rather than simply moving higher and pushing the peak out by another month, as has largely been the pattern throughout this rally, the curve is now pricing a more pronounced and prolonged period of tightness, while the long end has remained relatively anchored, which previously had also been lifted with the rest of the curve.

    galvalume steel coil

    SMU Survey: Mill willingness to negotiate price at lowest levels since 2021

    The majority of steel buyers responding to our latest market survey reported that mills continue to hold a firm grip on prices. The share of buyers reporting that mills were negotiable fell this week to the lowest rate seen in over five years. Every two weeks, SMU surveys service center and manufacturer buyers asking if mills are negotiable on new spot sheet and plate orders. In this week’s survey, just 3% of respondents said mills were willing to talk price to secure an order (Figure 1). This is down 11 percentage points from our mid-October survey.

    SMU flat-rolled market survey results now available

    The results of the latest Steel Market Update (SMU) flat-rolled market survey are now available on our website to all premium members. After logging in, look under the Data tab for Market Reports, and there you will find the Flat-Rolled Survey Results section. Previous survey results are also available on that page. If you need help accessing these results, or if your company would like to have your voice heard in our future surveys, contact smu@crugroup.com.

    Mill lead times climb to new highs, buyers expect little relief

    Lead times for sheet and plate products continued to lengthen amid historically tight supply, according to the latest SMU steel market survey data. Average lead times now extend into January 2027, with some mills quoting availability well into February. Lead times for all sheet products except Galvalume stand at their highest point since the post-Covid demand snapback in 2021. Plate lead times exceed their 2021 peak, setting a record in our data series, which dates to 2018. (We started collecting sheet lead times earlier, in 2011.)

    Fall maintenance winding down, but key outages remain

    The busy fall maintenance season isn’t over yet. Mill outages have rolled along since September, squeezing an already tight sheet market heading into November and beyond. Another round of scheduled maintenance is approaching, with outages still ahead at North Star BlueScope, ArcelorMittal Calvert, and Nucor Berkeley. Much of the fall maintenance calendar is now in the rearview mirror. September and October outages included U.S. Steel’s Gary Works; Nucor’s Hickman, Decatur, Gallatin and Crawfordsville operations; Steel Dynamics’ Sinton and Columbus mills; Cleveland-Cliffs’ Dearborn hot strip mill; NLMK Portage; and Big River Steel Works.