He said that the London Metal Exchange aims to reach 10 million mt of ferrous scrap CFR Turkey futures volume and 2.5 million mt FOB Turkey futures steel rebar trading volume by 2023.
The two contracts gained momentum due to high volatility in the physical market, which attracted more futures interest.
LME estimates that scrap CFR Turkey futures contracts, corresponding to Platts' average monthly physical assessment, will close 2022 with a trading volume of 4.5 million mt, following a post-pandemic recovery. LME CFR Turkey scrap futures contract saw 3.5 million mt traded in 2022, the highest annual transaction volume since 2018.
"Since its launch in November 2015, the LME steel scrap contract has traded approximately 21 million mt," Xodo told S&P Global on the sidelines of the event. “This year, average daily volumes for CFR Turkey steel scrap have grown by 52% compared to the same period in 2021 as the industry seeks a transparent tool to manage price risk.”
Annual volumes traded for the LME steel rebar futures contract, which corresponds to the monthly average of Platts FOB Turkey rebar assessment, are also expected to increase, with average daily volumes increasing by 70% since its launch in 2015.
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