PITTSBURGH — The scrap futures market continues its sluggish growth pace, but volumes traded so far in January have already outpaced those in December.

CME Group Inc.’s U.S. Midwest No. 1 busheling ferrous scrap futures contract still lacks interest on the buy and sell side, according to a broker at a New York financial institution that is active in an array of futures contracts.

“Since scrap derivatives are still a bit young, we are trying to keep the focus on iron ore and hot-rolled coil futures,” he said. “When we are ready to push it to our clients, we will push it. Right now, there is still a lot of background work being done by major liquidity companies on scrap futures, and there is not a lot of interest on both sides of the trade.”

Some 1,740 gross tons had been swapped on the futures exchange through Jan. 24, nearly double the 900 tons in all of December, which is notoriously slow on Wall Street. The contract’s record so far was 4,400 tons in October, one month after its debut.

February’s bids have improved to $390 per gross ton from $380 (amm.com, Jan. 18), but the contract’s spread remains at $20 as offers have risen to $410 per ton. The contract is settled based on AMM’s Midwest Ferrous Scrap Index for No. 1 busheling.

One recycler said he has been hedging copper for years and is watching the busheling derivatives market. “Eventually I can see this as an alternate to pricing on a ‘to be determined’ (TBD) basis. Instead of TBD, material could be moved out and settled on the CME scrap price,” he said.