LME scrap volumes increase on week, futures sharpen in contango

Volumes traded for the scrap futures contracts on the London Metal Exchange, which settled basis of the Platts assessment, increased on the week as spot prices recovered from two-year lows as the Turkish mills restocked on material following a flurry of rebar sales.

Platts, part of S&P Global Commodity Insights, assessed spot prices for physical imports of premium heavy melting scrap 1/2 (80:20) at $346.50/mt CFR Dec. 12, up $9/mt on the week from $337.50/mt CFR Dec. 5, with prices recovering as the mills returned to the market following a sustained pause in activity and pressure on the recycler.

Weekly LME scrap futures trading volumes in the week to Dec. 12 increased to 214,370 mt, up from 157,740 mt in the week from Dec. 5.

The December-March portion of the forward curve for Turkey scrap futures on the London Metal Exchange strengthened its sharp contango structure during the week, indicating that futures traders expected Turkish scrap prices in the physical market to increase in the medium term as availability tightened and restocking demand intensified.

LME rebar volumes decrease, futures maintain contango

Rebar futures volumes traded on the LME, which also settled basis the Platts assessment, decreased slightly but remained strong in the week to Dec. 12.

Platts assessed Turkish exported rebar at $565/mt FOB on Dec. 12, up by $2.50/mt on the week from Dec. 5 and recovering from $555/mt FOB Dec. 9 as Turkish traders and stockists speculatively booked material in anticipation of a rebuild in Syria supported by Turkish construction companies.

Weekly LME rebar futures trading volumes decreased to 20,680 mt in the week to Dec. 12, down from 37,900 mt in the week from Dec. 5.

The December-March portion of the forward curve for Turkey rebar futures on the LME maintained a contango structure, indicating that futures traders also expected Turkish rebar prices in the physical market to follow an upward trend in the near term.