LME scrap volumes firm in Aug to date, futures contracts in backwardation

Volumes traded for the scrap futures contracts on the London Metal Exchange in August to date have more than doubled in comparison with the whole of August 2023, reaching 766,320 metric ton, up from 355,570 t, as volumes continued to perform strongly with five trading days remaining in the month.

Spot prices for physical imports of premium heavy melting scrap 1/2 (80:20) fell on the week, and were assessed at $360/t CFR Aug. 22, down from $374/t CFR Aug. 15, with bearish price expectations less apparent as mills continued to restock at competitive scrap levels.

Weekly LME scrap futures trading volumes in the week to Aug. 22 increased to 350,520 t, up from 101,130 t in the week to Aug. 15.

The August-October portion of the forward curve for Turkey scrap futures on the LME entered a sharp backwardation structure, before entering a contango structure from October-November, indicating that futures traders expect Turkish scrap prices in the physical market to correct slightly in the near term, but recover in the medium term.

Rebar futures volumes traded on the LME decreased in the week to Aug. 15, as market participants largely shared bearish market sentiment in recent weeks while Turkish mills stepped back from the market having largely completed September bookings.

Weekly LME rebar futures trading volumes decreased to 2,830 t in the week to Aug. 22, down from 4,240 t in the week to Aug. 15.

The August-September portion of the forward curve for Turkey rebar futures on the LME entered a sharp backwardation structure, before entering a contango structure from September-November, indicating that futures traders expect Turkish rebar prices in the physical market to correct slightly in the near-term, but recover in the medium term.

Platts, part of S&P Global Commodity Insights, assessed Turkish exported rebar at $569/mt FOB on Aug. 22, stable on the day but down by $1/mt on the week from Aug. 15.