Hot Rolled Futures Waiting for Conclusion on USW Negotiations
By Steel Market Update - Fri 31 Aug 2012 07:34:45 CT
Related Keywords: Metals

Written by: Andre Marshall, CEO Crunchrisk LLC

Financial Markets

The stock market is sideways to down from two weeks back when I last wrote. It creeps up on money flows daily and then corrects quickly on realities. Right now it is waiting for Bernanke to speak Friday in Wyoming and therein lies the problem. It has no conviction of its own and very little volume. It reacts to headlines in hopes of central bank actions. In this period the USD is down across the basket of currencies almost 1% and as result both Gold and Copper are up about 2% and 1.5% respectively. Besides this USD retracement action, the market desperately needs stimulus.

HR NYMEX

We had a good week as the market dropped in earnest from about $655 in the balance of 2012 down to $620 zone, and $650 in 2013 down to $640 zone. This has proved to be a sweet spot at least temporarily and this week we traded 1286 lots or 25,720 ST. The CRU Wednesday post this week was $664, down $1/ST. We clearly have stalled. Everyone is waiting now to see the result of the USD/AM squabble. With the start of the Busheling contract beginning on the 10th, the HRC contract should find even more liquidity as companies and traders, who are exposed, start to look at the metal margin spread.


Scrap

Domestic scrap appears headed for a sideways month, but with the month starting with an expectation of higher, it wouldn’t surprise me if we end the buying at $10-20 down. First shred deals have happened between $400 and $410 so for now we are sideways.



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