PITTSBURGH The ferrous
scrap futures market is having a quiet month, even on
expectations that prime scrap prices will rise in March.
Mill buyers and scrapyards are
still monitoring activity and setting up trading accounts on
CME Group Inc.s U.S. Midwest No. 1 busheling ferrous
scrap futures contract. One mill source indicated that he plans
to hedge scrap when he senses the timing is right.
The mill source said he is not
extremely bullish on the second half of the year as it remains
to be seen what impact Nucor Corp.s 2.5-million-ton
direct-reduced iron (DRI) facility in Louisiana (
amm.com, Jan. 30) will have on the prime scrap
While some market players
suggested that the new DRI plant, which is scheduled to come
online midyear, could result in fewer pig iron imports, others
sense the new alternative iron capacity could dampen prices for
There is no sense hedging in a
failing price environment, the mill source noted. One scrap
processor told AMM he has taken some futures contracts
because he is bearish.
March bids were $390 per gross
ton, with offers standing at $410 per tonstronger
positions than a month earlier, when bids were $380 per ton and
offers were $395 per ton (
amm.com, Jan. 28). The contract is settled based
Midwest Ferrous Scrap Index for No. 1 busheling.
Some 1,000 gross tons had been
swapped on the futures exchange through Feb. 22, above the 900
tons swapped in December, which saw the lowest interest since
the contracts launch.
As of Feb. 22, there were 4,800
gross tons of open interest through August; 6,340 gross tons
have cleared so far in 2013.