Hot Rolled Futures: Bit of a Flurry

The following article on the hot rolled coil (HRC) steel and financial futures markets was written by Jack Marshall of Crunch Risk LLC. Here is how Jack saw trading over the past week:

Steel

HR futures had a bit of a flurry early this week following the price increase announcements by a number of mills. Over 55,500 ST of HR futures were traded. The bulk of the interest fell in Q1’18 where almost 40,000 ST were traded at a weighted average just above $654/ST. Prices moved higher in the beginning of the week to $660/ST, but have since retraced back just below $650/ST based on the last trade at $648/ST in Feb’18. Q2’18 HR was also busy with about 10,000 ST trading at a weighted average of about $647/ST or about a $7 discount to Q1’18. The latter half of ’18 traded in lighter amounts, but was pretty anchored at the $640/ST level.

Below is a graph showing the history of the hot rolled futures forward curve. You will need to view the graph on our website to use its interactive features; you can do so by clicking here. If you need assistance with either logging in or navigating the website, please contact our office at 800-432-3475 or info@SteelMarketUpdate.com.

Scrap

LME steel scrap futures have been fairly active the last week. A surge following some higher physical transactions has been followed by a small retracement mid-week on some decent selling volume. Jan’18 SC has been particularly active with over 10,000 MT trading in the last few days from as high as $356/MT on volume to as low as $352/MT here this morning.  

Midwest prime scrap BUS settled just above $347 per gross ton, pretty much in line with where the market was anticipating it would. Already some chatter that the market will again be higher in January. The BUS futures, however, have been subdued with Cal’18 bids coming in at the mid-$350 per gross ton range, but sellers cautiously much higher.

Today is the official start date for US Midwest Shredded Steel Scrap Financially Settled Futures. The NFX futures contract will be traded on the NASDAQ. The USD cash-settled NFX  futures are quoted in terms of USD per gross ton, and final settlement is based on the AMM US Midwest Shredded Steel Scrap Price Index. The NFX  futures size is 10 Gross Tons per contract. As soon as we get a futures curve for this market for this contract, we will begin to follow it in the series.

Below is another graph showing the history of the busheling scrap futures forward curve. You will need to view the graph on our website to use its interactive features; you can do so by clicking here. If you need assistance with either logging in or navigating the website, please contact our office at 800-432-3475 or info@SteelMarketUpdate.com.