Category: Futures

We can interpret that managed money still has expectations of price strength while physical participants are running closer to a balance on a net basis.

After a hot start to June, the CME ferrous derivatives complex has cooled down.

Could we see an abrupt shift now that oil prices have spiked higher? Will we see a rebound in the rig count? Will this create a snap-loading effect (think waterski rope), where the industry suddenly does a 180-degree turn? If so, will that bring with it increased demand for steel products used by the energy industry?

Never a dull moment in today's HR futures market.

A fierce flat price rally started this week that saw the nearby months rally by over $120/ short tons, exceeding the contract highs seen in February ahead of the first batch of tariffs.

The speed and scale of recent moves are reminders of just how sensitive HRC futures remain to structural shifts and sentiment cues.

The evolution of the U.S. HRC futures curve since my last update on April 17 tells a familiar story: fleeting optimism giving way to renewed caution.

Which way will the herd move?

Despite the hand-wringing and head-scratching about the impact of President Trump’s tariff policy, the HRC futures market has been relatively subdued since our last writing of this article.

The CME Midwest HRC futures market’s response to Trump’s election and subsequent comments about blanket 25% tariffs on Canada and Mexico was surprisingly counterintuitive.

The market appears to be pausing after a turbulent run. But tension remains just beneath the surface. With net long positioning still elevated, sentiment-driven selling could quickly reignite volatility. Still, supply constraints and limited imports are laying the groundwork for a resilient physical market. This moment of calm feels more like a crossroads than a conclusion.

A look at the HR futures market.

Market dynamics are shifting rapidly, with futures pricing diverging from physical fundamentals, creating a complex landscape for steel traders.

Another eventful week in the physical and financial steel markets is coming to a close, but with a markedly different tone than the last update at the end of February.

Over the past couple of weeks, Midwest HRC futures have been drifting lower on light volume. This begs the question if the rally has run out of steam, or is it catching its breath after ripping roughly $150 in less than two weeks? The April CME Midwest HRC future made an intraday high at $976 […]

Uncertainty has remained a dominant theme in the US ferrous derivatives markets over the past month. And the Trump administration's tariffs on steel and aluminum are still top of mind for market participants.

Headline risk has returned to the ferrous complex, with both hot-rolled coil (HRC) and busheling ferrous scrap (BCH) markets surging in response to fresh trade restrictions.

Four weeks have passed since the last article from Rock Trading Advisors on January 30. The paint has dried, and Midwest HRC futures have exploded higher in response to President Trump’s declaration of impending 25% tariffs on all imported steel products. The rolling 2nd month CME Midwest HRC future erupted through the top end of its downtrend, one that dates back to the peak of the winter 2022 rally. It also broke out of its narrow range seen dating back to June of last year.

Another eventful week in the physical and financial steel markets is coming to a close. Most importantly, this week provided complete clarity that, after months of waiting for a catalyst, we are now definitively in the early stages of a meaningful rally. The 3rd month future (currently the April contract) rose more than 8% for […]

It’s been an event-filled month in US ferrous derivatives markets since my last column for SMU. There’s been no shortage of writings and musing about the ongoing steel and aluminum tariffs proposed by the Trump administration. And steel and scrap futures markets have responded accordingly. CME HRC futures prices have risen, and the curve has firmed. The February 2025 HRC futures contract, now in the pricing period, has added $47 per short ton (st) since its contact lows on Jan. 20 to settle at $767/st today.

Since the publication of our last market update on Dec. 10, several notable developments have shaped the landscape

Midwest HRC indices have been stuck in a tight range since last summer with the weekly CRU Midwest HRC price spending the past 32 weeks between $656 and $714 per short ton (st). The rolling Midwest HRC future has been rangebound between roughly $650 to $800 since last June. The rate at which the price of HRC futures move over a certain period or “volatility” has compressed dramatically over the past few months.

The last six months have been littered with uncertainty and mixed signals, a choppy and rangebound market. Spot indices have largely held steady, despite the pressure from domestic mills pushing for higher prices on spot tons. This has provided a signal of a lack of upward momentum and little downside room based on mill costs. […]

US ferrous derivatives markets were largely quiet through the holiday period. Since the new year, however, we have seen a bit of a resurgence in interest as traders and sales staff return to their desks.

In the last article written for SMU, we looked at the rallies that followed both the 2016 and 2022 presidential elections, as well as the moves in the NFIB Small Business Optimism Index.

Import arbitrations expressed via futures may become enticing as coil price spreads expand. The spread market in CME US hot-rolled coil (HRC) is currently navigating a period of volatility, with prices fluctuating post-election, leaving traders uncertain about the market's direction.

After experiencing a rally ahead of the 2024 election, the nearby part of CME HRC futures complex has softened as we approach year-end. Meanwhile, the forward positions (second half of 2025) have remained supported and largely unchanged.

No more excuses! The election is over. Donald Trump will be inaugurated on Monday January 20 with the Republican party in control of Congress. Now, it is time to get back to work!

Since June, The US hot-rolled coil (HRC) futures market has been in a rare period of prolonged price stability, closely mirroring the subdued volatility seen in the physical market. Over the past five months, futures have been rangebound, with prices oscillating between a floor near $680 and a ceiling around $800. This tight range, highlighted in the chart, underscores a cautious market environment. The chart below shows the rolling 3rd month CME HRC Future.

After a relatively stable and boring September, CME hot-rolled coil (HRC) futures have been on the move lower thus far in October. Since Sept. 30, the November and December futures have declined $63 and $65, respectively, with the curve’s contango steepening.