LME scrap volumes dip slightly on week, rebar contract remains in contango

Volumes traded for the scrap and rebar futures contracts on the London Metal Exchange, which settles basis Platts assessments, fell on the week with volumes traded in the rebar and scrap contracts weakening.

Spot prices for physical imports of premium heavy melting scrap 1/2 (80:20) inched down on the week to be assessed at $386/mt CFR July 25, as Turkish mills expressed limited interest in deepsea scrap imports amid attractive billet offers from the Far East throughout the week which largely muted physical scrap import activity.

Weekly LME scrap futures trading volumes in the week to Aug. 1 fell slightly to 242,150 mt, down from 352,220 mt recorded in the week to July 25.

The August-September portion of the forward curve for Turkey scrap futures on the London Metal Exchange remained in a soft backwardation structure, before entering a contango from September-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. 1, despite improved Turkish export sales to Europe in the physical markets throughout the week.

Weekly LME rebar futures trading volumes fell to 18,330 mt in the week to Aug. 1, down from 30,610 mt recorded in the week to July 25.

The August-November portion of the forward curve for Turkey rebar futures on the LME remained in a contango structure, indicating that futures traders expect Turkish scrap prices in the physical market to recover in the medium term.

Platts assessed Turkish exported rebar at $575/mt FOB on July 25 , down $2.50/mt on the day and $5/mt on the week.

Platts is part of S&P Global Commodity Insights