Trading activity for the CME HRC futures contract has been
sporadic so far in June, with a few days seeing transacted volumes exceed
25,000 short tons (st). But overall activity remains muted. This follows a
pattern that emerged over the course of May.
Total open
interest in the HRC contract is 488,000 st, down roughly 75,000 st from the
highs seen towards the latter part of May. The entire curve structure has come
under pressure. But the front end has softened the most dramatically, following
a weakening physical market. Physical traders have reported soft demand and
high inventory levels, which are moving slowly. Some participants have reported
seeing tonnage offered in the mid-to-high $600s, with some July capacity still
said to be available.