CME Group busheling contract trades soar in February

Ferrous scrap futures logged another month of strong trades in the United States, with activity picking up in the final days of February just ahead of the March domestic scrap price settlement.

March 2, 2018

Trading volumes for CME Group’s US Midwest No. 1 busheling ferrous scrap futures contract reached 5,461 lots (109,220 gross tons) in February, according to American Metal Market’s calculations, which were based on the exchange’s final report for the month on Wednesday February 28.

Overall February trading volumes for the busheling contract far outshine the 1,467 lots (29,340 tons) traded in January. This contract is settled against American Metal Market’s Midwest index for No. 1 busheling.

Trading was modest on February 28 with 25 lots traded for April at $408 per ton, but activity was high the previous day with 650 lots changing hands.

In this transaction, 500 lots were traded for April at $408 per ton. The remaining 150 lots – split in equal batches of 25 lots each – were traded for each month beginning July through December at $410 per ton.

Volumes for the busheling contract hit a monthly high on February 7, with 1,425 lots traded that day. Activity was also high on February 20, with 840 lots traded.

Open interest on the contract stood at 5,285 lots (105,700 tons) on February 28.

The potential implementation of Section 232 penalties has already resulted in increased inquiries from metal market participants looking to neutralize their pricing risks, particularly via financial futures contracts, according to two industry consultants.