The London Metal Exchange’s US hot-rolled coil forward curve showed gains for the front-month and February contracts the week ended Dec. 24, while the remaining contracts moved lower over the week.
The December-January forward curve remained in contango with a spread of $65.50, down from $76.50 the week prior. While the remainder of the forward curve stayed in steep backwardation, the backwardation between the two- and three-month contracts softened to a spread of $8.50 as market sources expected HRC prices would plateau rather than drop precipitously in the first quarter.
Still, the spread between the three- and twelve-month contracts remained wide at $262.50, up from $244 the previous week.
The December contract moved $11 higher to $923/st, while the January contract decreased by $6.50 to $988.50/st. The February contract rose by $11 to $980/st, while the May contract fell by $18.50 to $857.50/st.
Both contracts on the further end of the curve moved lower, with the twelve-month contract decreasing by $2.50 to $717.50/st and the fifteen-month contract falling by $2.50 to $695/st.
The contract’s weekly trading volume saw a slight uptick the week ended Dec. 24, with the US hot-rolled coil contract trading 1,710 st on the LME that week. The weekly trading volume was up from 1,510 st in the week prior. Since its launch over 21 months ago, the contract has traded a total of 549,810 st.
The daily Platts TSI US HRC index moved $44.50 higher over the week and was assessed at $999.50/st on Dec. 24. Amid expectations of firm scrap pricing in January and persisting supply tightness, market sources anticipated mills would continue pushing HRC prices higher in the near term.
— Ingrid Lexova