PITTSBURGH The scrap futures market registered no trading activity for a third consecutive month, with the recent inflation of prices unable to draw potential players off the sidelines.
Trading volumes for CME Group Inc.s U.S. Midwest No. 1 busheling ferrous scrap futures contract remained at zero in October. The contract is based on AMMs Midwest Ferrous Scrap Index for No. 1 busheling, which settles on the 10th of each month. The November index settled at $431.18 per ton, up 7.5 percent from $401.16 in October (amm.com, Nov. 11).
With the large jump in prices, some scrap market sources were surprised that no one took a position to capitalize on the move.
"Volatility is needed for (scrap futures) to gain traction, but you also need a difference of opinion," one futures broker source said. "Everyone either wants to buy or wants to sell, and there is no difference of opinion."
Novembers bids are at $405 per ton with offers at $420, compared with $390 and $400, respectively, in October.
The growing hot-rolled futures market initially saw less interest than the scrap market, with only a handful of trades per year during its first couple of years, the broker said.
"This still provides opportunity for people, and I am still signing up participants and expect inquires to continue to enter the marketplace," he said.