The near-term scrap futures contracts on the London Metal Exchange were mostly stable over the week to Aug. 25, while weekly trading volumes increased.
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Register NowPlatts assessed the August contract up $2/mt on the week to $387.50/mt on Aug. 25, according to S&P Global Commodity Insights data. The September contract was unchanged on the week at $385/mt, while the October contract increased $2.50/mt to $382.50/mt. The November contract was stable at $376.50/mt on the week.
The backwardation over the August-November portion of the curve slightly strengthened, suggesting some futures traders were firm in their expectation of near-term physical prices to slightly soften in the near term, albeit maintaining elevated levels.
Spot prices for physical imports of premium heavy melting scrap 1/2 (80:20) increased $4.50 /mt week on week to $402/mt CFR Turkey on Aug. 25, after a fresh US-origin deal was booked Aug. 22. However Turkish buyers largely held back from deepsea purchases amid weak demand for finished steel.
"Scrap has limited availability, and other markets are looking to buy, so for now sellers will not be so keen to go below [$400/mt CFR]. they will wait until next week for the domestic settlements [in Europe, the US and the UK]," a Turkish trading source said.
Weekly LME scrap futures trading volumes over the week to Aug. 25 totaled 45,210 mt, up from 32,740 mt for the week ended Aug. 18.
Near-term rebar futures contracts also saw a mixed trend on the week to Aug. 25.
Platts assessed the August contract up $2/mt to $644.50/mt, according to S&P Global data. The September contract decreased $4/mt on the week to $641.50/mt, while the October contract gained $2.50/mt to $644.50/mt. The November contract was flat at $634.50/mt on the week.
The contango over the August-September portion of the forward curve shifted to a slight backwardation, suggesting that futures traders expected prices in the physical market to soften in the near-term.
The backwardation over the September-October portion of the curve shifted to a contango, while the backwardated structure over the October-November portion of the curve strengthened slightly.
Turkish physical rebar export prices decreased $7.50/mt on week to $645/mt FOB on Aug. 25, as Turkish mills continued to aim for higher prices amid strong scrap prices despite weak demand.
"I don't understand what Turkish mills are doing. They started buying scrap and pushed scrap up quickly without having the backup of finished steel sales," one UK trader said. "If they bring [rebar prices] down to $610/mt FOB the demand will return. The lack of demand is the global demand. Everyone is worrying. It is very lackluster in general," he said.
Rebar futures weekly trading volumes in the week on the London Metal Exchange totaled 4,720 mt during the week, down from 6,110 mt for week ending Aug. 18.
The daily outright spread between Turkish export rebar and import scrap was assessed at $243/mt Aug. 25, down $12/mt on the week.