Year-to-date trading of CFR Turkey scrap futures contracts on the London Metal Exchange surpassed the 11.50 million mt mark, according to the latest data.
The trading volume of LME CFR Turkey scrap futures for the year up to Dec. 5 totaled 1,174,310 lots, or 11.74 million mt.
The futures contract already reached an all-time annual trading volume high back in August when it topped the 8.08 million mt trading in the full-year 2023.
The average daily trading volume over 2024 to date totaled approximately 48,726 mt as of Dec. 6, up from an average of 31,219 mt recorded throughout 2023.
The LME CFR Turkey scrap futures contract settled against the monthly average of the physical Platts CFR Turkey premium HMS 1/2 (80:20) assessment.
"Just five years ago, many people would have questioned whether the steel industry could develop a functioning futures market," Alberto Xodo, product specialist Steel & Nickel at the LME, said. "But now, over one million tonnes per month are regularly trading just on the CFR Turkey LME steel scrap contract alone, and risk management is becoming a standard industry practice."
"The steel futures market has reached the stage where major industry associations like ISTA are presenting awards to steel derivatives traders and brokers in front of an industry crowd of over 550 people," Xodo added.
The International Steel Traders Association held its annual lunch in London on Dec. 6, during which it launched its inaugural ferrous futures broker award, having launched a steel futures trader award in 2023.
Henry Herbert, steel derivatives broker at GFI, won the inaugural ISTA Steel Derivatives Broker award, while Roland Gavin, trader at Anglo American, won the 2024 ISTA Steel Derivatives Trader award.
"This recognition is a testament to the incredible support of my team and the trust of our partners," Gavin said. "Together, we have championed LME steel scrap futures as a reliable risk management tool for the industry. Steel is the foundation that underpins our global economy, and ISTA plays a vital role in shaping the future development of steel markets."
Scrap futures market anticipates soft recovery
Weekly LME scrap futures trading volumes in the week ended on Dec. 5 were recorded at 157,740 mt, down from 265,190 mt traded in the week ended on Nov. 28.
The December-February portion of the forward curve for Turkey scrap futures on the London Metal Exchange maintained a clear contango structure, albeit at a lower level, indicating that futures traders expected Turkish import scrap prices to recover slightly in the near term, up from the sharp recent declines seen in the spot market.
Platts, part of S&P Global Commodity Insights, assessed Turkish imports of premium heavy melting scrap 1/2 (80:20) at $337.50/mt CFR on Dec. 5, unchanged on day, but down $27.50 from $365/mt CFR one month earlier on Nov. 5.
Turkish mills were heard to have stepped back from purchasing scrap and continued to report a lack of end-product sales for January, which has restricted demand for ferrous scrap imports, giving the mills room to pressure recyclers into selling lower.
Rebar futures volumes traded on the London Metal Exchange increased in the week ended on Dec. 5, with the Turkish mills currently struggling to attract demand in both their export and domestic market, prompting offers to fall sharply in recent weeks.
Weekly LME rebar futures trading volumes increased to 37,900 mt in the week ended on Dec. 5, up from 26,310 mt recorded in the week ended on Nov. 28.
The December-February portion of the forward curve for Turkey rebar futures on the London Metal Exchange remained in a contango structure, indicating that futures traders expected Turkish rebar prices in the physical market to recover in the near-term.