CRU: HR coil futures trading volume surges on trade talks

CME Group’s HR coil futures have had a volatile stretch over the past few weeks. During the third week of August, daily trading volume surged to more than double the prior week’s level as prices quickly fell. This trading activity came alongside increasingly active trade discussions between the US and Canada to lower the Section 232 tariff on steel as part of a larger trade deal. As trade discussions progressed, futures volume traded over the week surged by 140% week over week (w/w), reaching 369,800 tons. 

These trade discussions ultimately failed to bring about a new trade agreement and over the 10 trading days since then, futures prices have reached new highs for not only Q4’26, but 2027 as well. Closing values as of this past Friday, Sept. 4, reflected a Q4’26 price average of $1,232 per short ton (st), up $52/st from our last review on Aug. 10 while 2027 prices now average $1,127/st, a $42 /st increase. 

Based on settled prices through August and the current forward curve through December, HR coil in 2026 will average the second-highest price in history at $1,122/st. This is well above what the forward curve priced in a year ago. In fact, our review in September 2025 showed the forward curve pricing in $880 and $884/st for 2026 and 2027, respectively, a premium of 8.6% over spot prices at the time. Today, futures are pricing in $1,127 and $1,100/st, for 2027 and 2028 respectively, which is around a 7% discount to spot prices today. 

These futures prices are at a substantial premium to not only annual prices over the past several years but also to costs for both BF and EAF-based steel production. Due to this, physical sellers may want to think about hedging some of their price risk exposure for the coming quarters or years, especially if some easing of the S232 comes about for North American trading partners.