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 itsâ€™ launch in 2003.
How NYMEX's Steel Futures Contracts Relate to the Physical Steel Markets
Steel prices have seen substantial movements in recent years. The price range over the past two years for hot rolled coil steel futures covers around $350, or over 50% of the current prices. With this level of volatility, steel industry firms have been embracing risk management strategies throughout the value chain, as can be seen in the increased NYMEX futures volumes.