scrap futures market remains in hibernation, with no trades
made for a second consecutive month.
trading volumes for CME Group Inc.s U.S. Midwest No. 1
busheling ferrous scrap futures contract remained at zero, with
a lack of volatility in scrap metals prices still the driving
force behind the lack of interest.
The CME contract is
based on AMMs Midwest Ferrous Scrap Index for
No. 1 busheling, which settles on the 10th of each month. The
October index settled at $401.16 per ton, up marginally from
$400.07 per ton in September (
amm.com, Oct. 10).
"The futures market is
designed to protect large inventories and there is no need to
buy into it right now," according to one broker who focuses on
are at $390 per ton with offers at $400, compared with $395 and
$405 per ton, respectively, in September.
The lack of a peak or
valley is holding back any growth, a second broker said.
"No volatility has
hurt peoples interest, and we need to see some healthy
increases to spur people to get off the fence. It is hard for
it to gain traction when stable prices have hampered the
impetus for people to use (the futures contract)," he said. "If
you have a situation of prices not doing a whole lot, then
there is not going to be a lot of use for hedging as a
The hot-rolled steel
futures market also saw a period of inactivity during its
start-up, both futures brokers said.
The scrap market in
itself isnt helping the cause, according to the second
broker. "Scrap prices could go up $10 a ton next month," he
said. "But at todays prices, who is going to get excited