Tag: Hot Rolled Futures

It has been a crazy 2024 so far for hot-rolled coil (HRC) futures!!! 

SMU’s sheet prices firmed up modestly this week, even as CME hot rolled futures declined. What gives? My channel checks suggest that demand remains stable and that buyers have returned to the market following new HR base prices announced by mills earlier this month. I’m looking forward to seeing whether lead times, which have stabilized, will start extending. SMU will have more to share on that front when we release updated lead time figures on Thursday. As for HR futures, what a reversal! As David Feldstein wrote last Thursday, bulls expected mill price increase announcements. And we briefly saw the May contract climb as high as ~$1,000 per short ton (st).

2024 started with a $200 per short ton (st), one-week demon drop in the CME Midwest hot-rolled (HR) coil futures. Then, HR futures consolidated in the low $800s/st with the April future trading to as low as $770/st as the curve shifted into contango or upward sloping. A big move was expected, and a big […]

Hot rolled (HR) futures have been on a bit of a hot streak recently, while busheling futures have been more in the “not” category.

The March scrap trade is set to pick up steam next week.

After holding steady for most of January, the hot rolled (HR) index has started to gain some downward momentum. In the last 30 days, it has declined $89 per short ton (st) and is sitting just above $1,000/st.

What a difference a few weeks make…. As this is our first column after the new year, it is quite interesting to observe how different the steel world looks at the end of January vs. the end of December. 

Much discussion has centered on HRC futures and option liquidity. The perceived lack of liquidity is often used as a reason for not engaging in risk management, a profound folly in our opinion. Looking back over the last decade, the futures market has seen increased volume. The HRC futures volume in 2023 was 617% of 2013 numbers.

After a holiday period that saw HR futures volumes somewhat muted in December, the first week of January brought with it increased interest reflected in higher volumes.

Trading slowed across the Midwest hot-rolled coil (HRC) futures curve in the final weeks of 2023, with prices drifting mostly sideways through the month of December.

Last week in Chicago, we hosted several metals companies for our bi-annual Metals Price Management Seminar (“MPMS”).

Oct. 26 was my previous Steel Market Update contribution. The night before, Ford and the United Auto Workers (UAW) announced they had reached a tentative agreement for a new labor contract.

In the dynamic landscape of the steel futures market, a confluence of factors is shaping the current narrative.

Several past columns in SMU have included comments about the futures forward curve, using terms like contango and backwardation

These were the headlines hot off the press Wednesday night:

Well, what a difference a month makes…

If the last few years have taught us anything, it is that nothing is certain.

What has happened since the August hot rolled (HR) settlement ($767 per short ton)?

On Sept. 15, the UAW went on strike at three plants, one of each of the Big 3. On Sept. 22, the UAW expanded its strike to 38 more GM and Stellantis plants. Since Sept. 15, the HRC futures curve has rallied $60-75 in the November – February futures months. The reason why there has been this breakneck rally is because, uh, well, um. I have no idea. I am as shocked by it as perhaps you are, frankly.

Hot-rolled coil (HRC) futures prices fell after our last column published Aug. 17, putting in recent lows around $25-$30 per ton lower than the week prior

The hot rolled (HR) forward curve has rebounded following the Labor Day weekend. The index this week surprised a few folks as it barely slid double figures and remains above $750 per short ton (ST).

Spot hot rolled (HR) prices continued their gradual decent, losing almost $100 per short ton (ST) in August.

Over the first three months since Flack started contributing a futures column to SMU, the first sentence has started with some version of “What a month!”

Over the last month, SMU columns have referenced significant fluctuations in the Hot Rolled Coil Futures market as participants sift through the impact of several events, including some that are yet to be resolved.

The last article I wrote on Thursday, July 13, pointed to the surprising rallies in the August and September futures, while noting the August future trading to just below its multi-year down trendline.

The summer cycle has brought more focus around the uncertainty of where HR prices are headed.   Spot indexes continue to bleed lower despite price hikes from sheet mills. Market talk is of still lower prices as the gap grows between the slow-moving index versus expectations for HR future prices declines. (The index likely reflects smaller, […]

The US HRC Futures market has been on a roller-coaster ride since our last update (green). In early July, the front month futures contracts surged significantly as news of Steel Dynamics Inc.’s (SDI’s) Sinton, Texas, mill outage trickled through the market (blue).

In the past two months, the US Midwest Hot Rolled Coil (HRC) futures market has experienced significant fluctuations. The initial decline in prices led to destocking and low inventory levels. However, recent price increase announcements by mills halted the downward trend and even reversed it temporarily.

Editor’s note: SMU Contributor David Feldstein is president of Rock Trading Advisors. Rock provides customers attached to the steel industry with commodity price risk management services and market intelligence. RTA is registered with the National Futures Association as a Commodity Trade Advisor. David has over 20 years of professional trading experience and has been active […]

Editor’s note: SMU Contributor Michael D’Angelo is a researcher and trader at Marex. In his role, Mike performs fundamental and quantitative analysis, which directly leads to actionable trading/risk management strategies across the base, precious, and ferrous metals derivative spaces. Prior to joining Marex, Mike received a BA in economics with a minor in finance from […]