LME rebar contracts maintain contango curve, weekly trading volumes mixed on week

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. 28 decreased to 265,190 mt, down from 382,150 mt in the week to Nov. 21, as sellers continued to face bearish price expectations from the Turkish mills reporting a lack of finished steel sales and consequent disinterest in scrap imports.

Platts assessed spot prices for physical imports of premium heavy melting scrap 1/2 (80:20) at $340/mt CFR Nov. 28, down $5/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 the medium term.

Weekly LME rebar futures trading volumes increased to 26,310 mt in the week to Nov. 28, up from 730 mt in the week to Nov. 21, 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 $567.50/mt FOB on Nov. 28, down $2.50/mt on the week from Nov. 21, as sentiment remained largely bearish with expectations of further price declines due to cost pressures.

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