LME scrap volumes increase on week; rebar forward curve in contango structure

Volumes traded for the scrap futures contracts on the London Metal Exchange, which settle basis the Platts assessment, increased on the week.

Weekly LME scrap futures trading volumes in the week to Sept. 19 increased to 194,970 metric tons, up from 124,570 metric tons in the week to Sept.12.

Spot prices for physical imports of premium heavy melting scrap 1/2 (80:20) remained flat on the week, and were assessed at $370/mt CFR Sept. 19, as sentiment remained cautious, with prices inching up amid limited physical activity and mixed reports on trading values, as participants await clearer signals from rebar domestic demand and external market conditions.

The September-November portion of the forward curve for Turkey scrap futures on the LME entered a slight backwardation, before entering a contango structure from November-December. However the rangebound forward curve suggested market uncertainty over near-term physical price direction.

Rebar futures volumes traded on the LME decreased in the week to Sept. 19, despite mills continuing to keep a firm stance with strong domestic market support in the week.

The September-November portion of the forward curve for Turkey rebar futures on the LME maintained a largely flat structure, before entering a contango structure from November-December, indicating that futures traders expect Turkish rebar prices in the physical market to recover in the medium term.

Platts assessed Turkish exported rebar at $580/mt FOB on Sept. 19, up by $2.50/mt on the week from Sept. 12.

Platts is part of S&P Global Commodity Insights.