US HRC LME March, April contracts see small losses; rest rises

Pittsburgh — The London Metal Exchange's US hot rolled coil forward curve showed losses for the March and April contracts the week to March 12 while the remaining contracts registered gains over the week.

The March-April spread's contango widened from $29.50 the previous week to $42 while the rest of the forward curve maintained its backwardation. The front- to six-month contracts remained above the $1,150/st mark, suggesting HRC prices would remain elevated into the third quarter.

The May-August backwardation softened to $118.50, down from $151 the previous week. Still, the spread between the six- and 12-month contracts showed a larger falloff of $311.

The March contract moved $17.50 lower at $1,252/st while the April contract fell $5 at $1,294/st. The May contract ended the week $14 higher at $1,293.50/st while the August contract increased by $23 at $1,175/st.

Both contracts on the further end of the curve moved higher and sat above the $800/st mark.

The contract's weekly trading volume fell slightly the week to March 12, with the US HRC contract trading 3,900 st on the LME that week, down from 4,510 st the week prior. The contract has traded a total of 589,130 st since its launch in March 2019.

Limited availability continued to affect the spot market, as two Midwest mills offered spot tons at $1,300/st and were able to book orders at that price, while some other mills targeted even higher pricing. Despite elevated offer levels, market sources said end-user demand remained strong.

As supply tightness persisted in the spot market, HRC prices rose to new all-time highs. The daily S&P Global Platts TSI US HRC index rose $53.50 over the week and was assessed at $1,299/st on March 12.