volume of scrap futures traded on the CME last month fell to
the lowest level since its launch after posting its highest
total the previous month.
volume for CME Groups U.S. Midwest No. 1 busheling
ferrous scrap futures contract totaled 700 gross tons, down
from 13,300 tons in May.
May was bolstered by a
single position taken in a contract of 12,000 tons,
outperforming the previous two months combined and exceeding
all scrap futures contracts from September through December
last year (
amm.com, May 15).
June, however, showed
an even smaller presence than the exchanges September
launch, with positions being taken for 1,320 tons. Open
interest contracts that have not yet settled total 17,620
A scrap futures trader
said that June was quiet for two reasons. "Market prices got
too low for sellers to be interested and there was no
conviction driven by supply and demand to try and trade at the
higher numbers," he said.
July bids are at $375
per ton, with offers at $390 per ton, compared with $368 and
$380 per ton, respectively, in June. The CME contract is based
on AMMs Midwest Ferrous Scrap Index for No. 1
busheling, which settles on the 10th of each month.
The July scrap market
took a sharp upturn but the spike was not enough to motivate
speculators, the futures trader said. "Even though the physical
market flipped so quickly, there was no buying interest as it
is unsure if this a sustained rally."
participants are establishing accounts, which is a sign that a
lot more trades will be done in the future, he said.