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Demand for HRC steel in the US is strong; however, there are concerns that demand could fall in the second half of 2022, according to Argus. Buyers are doing minimal spot purchases, and some are even reducing purchases to below contract minimums. Sources also told Argus that lower raw-material costs could put further downward pressure on prices for finished steel products such as cold-rolled coil (CRC) and hot-dipped galvanized coil (HDG). |
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In Argus’ most recent assessment, CRC dropped by $127.25/st to $1,315/st, and HDG fell by $87.50/st to $1,312.50/st. American end-users of CRC & HDG steel products could use CME HRC Steel swaps and options as a proxy hedge for their physical usage. Even though demand for finished steel products is expected to fall through the remainder of 2022, CRC & HDG end-users might consider hedges that provide upside price protection, such as buying swaps or calls options, both of which would establish a maximum price. Such positions are basic for end-user hedging; however, they can result in opportunity costs or cash costs if metal prices decrease. Please contact AEGIS for specific strategies that fit your operations. (7/14/2022) |
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Note: Clients with AEGIS Platform access can see this and other research, plus hedge portfolio reporting and tools here. |
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Price Indications |
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Today's Charts |
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AEGIS Insights |
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07/13/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 07/07/2022: Have Copper Prices Begun to Find a Bottom? 06/23/2022: What is Green Steel Anyways? |
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| Important Headlines | ||
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7/13/2022: Column: Collapsing metal inventories clash with plunging prices 7/13/2022: Latin America steel demand to fall in 2022 -industry report 7/12/2022: Goldman goes cold on copper price 7/12/2022: China ramp-up pushes aluminum prices to 14-month lows 7/11/2022: Explainer: What happens if Germany's Russian gas flows stop 7/11/2022: Column: China's massive stimulus talk does little for metals as confidence fades 7/11/2022: Indian shares pare losses to end flat after reports of export tax on steel ending 7/11/2022: India’s finished steel exports fall 53 per cent in June |
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Important Disclosure: Indicative prices are provided for information purposes only, and do not represent a commitment from AEGIS Hedging Solutions LLC ("Aegis") to assist any client to transact at those prices, or at any price, in the future. Aegis makes no guarantee to the accuracy or completeness of such information. Aegis and/or its trading principals do not offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program. Certain information in this presentation may constitute forward-looking statements, which can be identified by the use of forward-looking terminology such as “edge,” “advantage,” “opportunity,” “believe” or other variations thereon or comparable terminology. Such statements are not guarantees of future performance or activities.
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