Trading volumes fell this week; some long hedges have continued to roll further down the curve in order to earn some of what's left of the backwardations, or contangos. The HRC spot market has seen recent spot tradable values of up to $1,500/st this week for June production.
The Platts TSI US HRC index hit a record high $1,429.50/st on April 21 and has held there since, as prices are up $990.25/st since August 2020, when the recovery began.
The market saw the rolling of hedges mainly in the second-quarter as shorts looked to take advantage of the May-June contango, which traded around $5-$10/st, as the curve structure loosened significantly on April 27 from the prior week. Some long consumer hedges were rolled from Q3 into Q4.
The April-May spread moved into a wide contango and went out trading around $150/st contango on April 26, from a $33/st backwardation on March 30, as supply remains tighter for a longer period, along with rising producer prices, long lead times and transportation concerns.
