The London Metals Exchange’s US hot-rolled coil forward curve moved to a backwardated structure in the week ended June 18, as trading volumes remained low.
As the contract’s trading volumes stayed under pressure amid elevated spot prices, contract prices were mostly flat over the week. The forward curve showed slight backwardation for the front- to three-month contracts and a steep drop-off of over $600 between the three- to 12-month contracts.
The June contract rose by $13 to $1,668/st over the week, settling $17 below the latest daily Platts HRC spot price of $1,685/st.
The July contract remained flat at $1,665/st, while the August contract ended the week at $1,660/st. The November contract moved $4 higher to $1,340/st. Both contracts on the further end of the curve held at $1,050/st over the week.
Despite the standstill in the futures market, spot prices in the physical market continued to move higher over the week. The daily Platts TSI US HRC index increased by $27.25 over the week and has gained over $60 since the beginning of the month. While some mills offered their July production at as low as $1,650/st, integrated mills targeted offer levels above the $1,700/st mark for their August availability.
— Ingrid Lexova