As international exchanges continue to encourage trade in their ferrous contracts, Fastmarkets asks market experts for their views on progress in steel price risk management over the past year and the outlook for 2020.
Speaking with Fastmarkets a year ago, Phillip Price, steel derivatives expert, and since then founder of Pool, said that he had seen a sea change in the steel sector's attitude toward price risk management, hedging and derivatives, with a number of new participants making test trades, including one or two mills.
One year on, he said in January 2020 that the trend and momentum have continued: "There is an even wider range of participants from across the supply chain integrating price risk management tools into their business." Pool is now working with multiple steelmakers to help them implement a strategy. As a sector, steel mills are showing the biggest growth of new interest, Price noted.
That interest is coming from electric arc furnace (EAF)-based mills in particular. Price added that they are using scrap derivatives at the feedstock end of their business, but are also generating more liquidity...