Economy
April 12, 2019
CRU & CME Discuss Hot-Rolled Coil Price Volatility: Buckle Up
Written by Tim Triplett
US Midwest HRC price volatility has increased markedly in recent months as government policy and inelasticity of domestic supply have led to large variations in physical market price. Concurrently, volume and open interest on the CME’s HRC futures and options contracts, settled on CRU’s US Midwest HRC price (“The CRU”) has surged as physical market participants look to manage price risk.
This futures contract has enabled users of the CRU to effectively hedge with minimal basis risk, taking advantage of a contract that has grown consistently with increasing liquidity while settling their physical contracts on the index of choice in the market.
