Futures
March 27, 2014
Hot Rolled Futures Bounce with Renewed Optimism…
Written by Bradley Clark
With the expected steel price hikes finally coming to fruition the futures market has reacted strongly as offers were lifted and bids take a step up. After months of a down trending physical market sentiment has taken a clear turn to bullishness. The nearby months (March and April) traded to lows around $615 last week before trading sharply higher to $640 and $650 today. The second half of the year has experienced similar strength albeit at a bit more subdued levels with Q3 and Q4 steel trading up from lows of $620 last week to $635. Volumes have been strong with over 20,000 tons trading the past couple of weeks as traders who have previously been on the sidelines have reentered the market to either cover shorts or establish length.
In the physical market it feels that mills have been much more disciplined falling last week’s price hikes. This discipline along with lengthening lead times, a firming scrap market and warming temperatures should conspire to drive prices to the upper range of recent mill offerings around $660 over the next few weeks.
