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The London Metal Exchange's Steel Scrap CFR Turkey futures contract traded 3,370 mt (or 337 lots) over Nov. 1-2, the first two days of the LME's liquidity window initiative to boost screen trading volumes for the contract.
The LME launched a liquidity window initiative for its LME Steel Scrap CFR Turkey and Steel Rebar FOB Turkey contracts on Nov. 1, which runs between 4 pm and 4.30 pm UK time on a daily basis on LMEselect, the exchange's electronic member-to-member trading system, for contract months 2, 3, and 4 ahead on the forward curve.
On Tuesday Nov. 1, approximately 1,650 mt of LME Steel Scrap CFR Turkey traded on LMEselect, during the 30-minute liquidity window from 4 pm. On Wednesday Nov. 2, 1,720 mt of the LME Steel Scrap CFR Turkey traded during the liquidity window.
"We are encouraged to see strong volumes and tight spreads just two days into our newly launched ferrous liquidity window on LMEselect," Robin Martin, LME Head of Market Development, said.
"On Wednesday [Nov. 2], we saw bid-offer spreads as tight as $0.50 on the Dec-22, Jan-23 and Feb-23 scrap futures contracts. We hope to see this new initiative gain momentum over the coming weeks and months – supporting and enhancing electronic liquidity across our ferrous suite."
Roughly a dozen companies were supportive of the initial effort to establish the liquidity window and boost screen trading volumes for the LME Steel Scrap CFR Turkey and LME Steel Rebar FOB Turkey contracts, Platts understands.
The two futures contracts settle against the monthly average of the respective physical assessments by Platts, part of S&P Global Commodity Insights.
The daily trading volume on the LME, inclusive of the liquidity window, totaled 16,930 mt on Nov. 1 and 33,430 mt on Nov 2.
Over 2022 to date, the LME Steel Scrap CFR Turkey has traded 3,661,070 mt as of Nov. 2, the highest annual total since 2018, when 4,848,430 mt traded. In 2022, the LME Steel Rebar FOB Turkey contract has traded 864,760 mt as of Nov. 2, an all-time annual high since the contract launched in late 2015.
The LME is aiming to reach 10 million mt of ferrous scrap CFR Turkey futures traded volumes and 2.5 million mt of FOB Turkey steel rebar futures traded volumes in 2023, Alberto Xodo, LME's vice president-sales, said Oct. 27 during the LME Focus Day event.
spglobal.com
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