Steel futures traders buyer the dip but confidence is still restrained
Restrained confidence crept back into steel futures markets on Wednesday, with finished products instruments leading the pack slightly higher and providing some support for EAF conversion margin futures in both regions.
Exchange Prices at 1630 GMT
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LME SCRAP & REBAR FUTURES
LME EAF futures recovered a small portion of yesterday’s declines on Wednesday, led by medium-term LME Rebar buy-side interest as paper traders sought to take advantage of the discounts futures present versus the spot market. LME Scrap futures encountered a little more resistance, although the front end Contango maintained.
US HRC FUTURES
US HRC futures continued their pattern of being bid higher in the morning session before being offered lower later in the day on Wednesday, with a lower print for the weekly index that settles CME’s instrument clashing with a higher print for the daily index which settles US HRC futures at the LME. Spot market sentiment seems to be firming. But there are still plenty of inventory holders out there willing to hedge their exposure.
FOB CHINA HRC FUTURES
Another range bound day for the LME FOB China HRC futures contract, with a creeping realisation of the true steel market situation in China keeping the bulls in check.
US SCRAP FUTURES
CME Busheling futures lifted slightly on Wednesday as bullishness regarding the upcoming monthly settlement sustained.
LME EAF conversion margin futures retained their support above $150/t on Wednesday with Q2-20 buy-side LME Rebar futures supporting the balance of the curve.
US EAF conversion margin futures continued to gain ground on Wednesday, benefiting from the flat CME Busheling futures curve shape and renewed confidence in spot market HRC prices.
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