Busheling contracts get boost from steel and scrap price volatility
The highlevel of uncertainty and price volatility in the US steel and ferrous scrapmarkets has motivated many companies in the steel supply chain to turn tofutures and other hedging tools to manage their risk over the past 18 months.
As aresult, CME Group has been seeing steady volume and open interest growth inboth its hot rolled coil (HRC) and No. 1 busheling scrap futures contractsaccompanied by a shift in participation demographics. This indicates that notonly are the traditionally conservative steel and scrap supply chains becomingmore comfortable with using these financial instruments, but financial playersare also increasing their participation as the liquidity of these contractsgrow.
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Beyond the Tipping Point: Steel Futures Turn a Corner
No one expected steel futures to steal the spotlight from and outshine the physical market overnight. It simply was not on the cards. Too much tradition, too many entrenched commercial relationships, too diverse a product mix, and too little familiarity with the dynamics of the futures market and exchange trading. Add to that the resistance that comes with the prospect of quantum change and a market landscape that appears tranquil compared to the hyper-volatile conditions that characterize the current ferrous metals arena.More than a decade-and-a-half since early proponents first launched efforts to make futures a fixture of deal making, read how the tonnage transacted on CME Group in 2019 marks the highest monthly volume recorded in the history of Steel Futures since its' launch in 2003.