Plenty of uncertainty around February prices

摘要

Turkish scrap futures on the London Metal Exchange largely defied most market players' bearish medium-term outlook for Turkey's steel sector by moving into a contango from the start of this year. The forward curve for Turkish scrap on the London Metal Exchange is usually in backwardation, but this has changed of late, with March futures at $287.50/mt trading above the front-month February contract at $284.50/mt. Given the current economic situation and bearish news from the Turkish finished steel markets and already tight steelmaking margins, this surprised several market participants who expected finished steel prices to pressure prices of raw materials such as ferrous scrap in the medium term. However, others have developed a bullish price outlook for scrap, irrespective of their expectations on the finished product side.