U.S. sheet prices continue to move higher as we move through April. Supply tightness, from lower imports and upcoming supply outages amid seasonally improving demand is supporting prices.  U.S. HR Coil prices are now at $1,038/s.ton, a 3% m/m increase and represent the highest level since January 2024. The HR Coil and CR Coil spread has started to tighten over the previous few weeks and now sits at $130/s.ton with reports of more availability. HDG Coil rose 2.7% m/m to keep pace with HR Coil.

Lead times have climbed to nearly seven weeks, with the high end reaching nine weeks as of April 1, per Steel Market Update. Spot volumes remain limited and market participants are watching upcoming outages closely. Import supply rose slightly in March but remain almost 300 kt down y/y. The conflict in the Middle East is still ongoing, however, which will continue to raise the price of both imports and domestic input costs as fuel costs are elevated. There could be relief here in the near term as the recent cease fire agreement sent oil futures below $100 /bbl for the first time since the conflict began.

Demand is holding up. Steel Market Update reported that daily shipping rate rose 12% in February, reaching its highest point since March 2025, consistent with the expected seasonal pickup into 2026 Q2. Macroeconomic indicators remain mixed with 30-year mortgage rates jumping back up to nearly 6.5% in the first week of April and inflation expectations rising for the near term raised due to the ongoing conflict. Manufacturing data has been more positive as the general PMI and new orders have expanded for three straight months.

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Open interest on CME Group HR Coil futures market fell as near term prices strengthened. There has been a sharp decline, has now been delayed to the beginning of Q3. Later contract dates are trading significantly higher than at the start of the year.

This commentary covers CME Group HR Coil futures at market close this past Tuesday, April 7. As March closed, open interest for HR Coil futures contracts fell sharply from the peak. Total open interest fell almost 17% w/w from March 24 to March 31, the largest such decline since August 2025. This reduced the managed money net long position that had been building throughout the year, which fell by 25%. However, both open interest and net managed money long positions remain near all-time highs.

Near-term contracts reflect continued tight market conditions and uncertainty stemming from the ongoing conflict in the Middle East. The peak has been pushed back to June after plateauing in May, but at prices almost $50/s.ton higher than the previous peak, suggesting the price rally still has room to run.

The sharp decline after the peak remains and aligns with the loosening of the physical sheet market around the same time.

The back end of the curve continues to pick up meaningfully. Contracts four to six months out are now $54/s.ton higher, flattening the curve sooner. Contracts from 2027 through 2029 are now trading at $977/s.ton, $56/s.ton higher than last month and nearing $100/s.ton above where they started the year. While the far end of the curve is not a forecast, it suggests some market participants expect a higher equilibrium price over the longer term.

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