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Busheling futures point to down market

Apr 24, 2019 | 12:29 PM | Pittsburgh | Lisa Gordon

Tags  ferrous scrap, scrap futures, No1 busheling, CME Group, scrap price, Lisa Gordon

Buyers continue to take healthy positions in the No1 busheling futures market, with 423 lots (8,460 gross tons) sold on Tuesday April 23, a daily report from CME Group showed.

But it remains unclear whether the sales were made by finished steel buyers or industrial scrap buyers seeking to protect their inventory in a market that has been under downward pressure.

The lots sold expire between May and February 2020 and follow two other large sales this month - 429 lots on April 18 and 650 lots on April 12 - in addition regular smaller trades.

Prices were mixed, with 81 lots for May expiration sold at $340 per ton, down by $10 per ton from the previous business day; and 12 lots expiring in June sold at $345 per ton, down $5 per ton. The July, August and September expiration contracts were all unchanged at $350 per ton, with 50 lots, 51 lots and 58 lots traded respectively.

Prices deteriorated from there, with the October contract trading 63 lots at $346 per ton, down by $4; and the November and December contracts each trading 52 lots at prices that were down by $5 and $8 respectively to $343 and $340 per ton. The remaining trades were for January and February 2020 expiration, with each trading two lots at prices that were down by $7 and $2 respectively to $333 and $328 per ton.

CME's busheling futures contracts are underpinned by Fastmarkets AMM's No1 busheling domestic Midwest Index, which settled at $350.50 per ton in April, down from $372.32 per ton in March. The next settlement will be on May 10.

Open interest on the contract stood at 4,207 lots, or 84,140  tons, at the close on April 23. 


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