LME scrap volumes climb on week as spot prices falter

Volumes traded for the scrap futures contracts on the London Metal Exchange, which settle basis the Platts assessment from S&P Global Commodity Insights, saw a significant increase on the week.

Weekly LME scrap futures trading volumes in the week to Nov. 21 surged to 382,150 mt, up from 199,320 mt in the week to Nov. 14, as participants chose to hedge against prices in the physical market which fell sharply, owing to a weak euro and oversupply in the European region, as well as slowed demand from the Turkish mills due to a lack of rebar sales.

Platts assessed spot prices for physical imports of premium heavy melting scrap 1/2 (80:20) at $345/mt CFR Nov. 21, decreasing $11/mt on the week.

The November-December portion of the forward curve for Turkey scrap futures on the London Metal Exchange steepened its backwardation structure in the short term, before entering a contango structure for January and February, indicating that futures traders expect Turkish scrap prices in the physical market to recover in early 2025.

Weekly LME rebar futures trading volumes fell to 730 mt in the week to Nov. 21, down from 2,340 mt in the week to Nov. 14, with limited sales activity also reported in the physical export market during the week.

Platts, part of S&P Global Commodity Insights, assessed Turkish exported rebar at $570/mt FOB on Nov. 21, down $10/mt on the week from Nov. 14, as rebar sales slowed both domestically and in the export market amid weak demand.

The November-February portion of the forward curve for Turkey rebar futures on the LME maintained a sharp contango structure, indicating that futures traders expect Turkish rebar prices in the physical market to follow an upward trend in the medium term.