The London Metal Exchange's (LME) cfr Taiwan scrap contract traded for the first time in the broker market on Wednesday.
The contract, which launched on 19 July this year, traded at $342/t for February between two traders, in a deal brokered by SSY.
Liquidity on the fledgling contract has been slow to develop, but there are physical traders actively making markets on it. Today, the bid-offer for February was $338-348/t in the broker market, flat to both January and December.
The underlying Argus cfr Taiwan 80:20 index was static at $340/t today. Physical buyers are holding back with the expectation that prices will soften further, with billet sales heard as low as $500/t cfr. At the same time, merchants are for now rejecting low bids and preferring to stay out of the market.
Separately, the LME has started showing bids and offers from LME Select on its website for its steel contracts, in a bid to boost transparency and liquidity. "As an active participant in the LME's steel contracts, Stemcor is fully behind this effort to help build liquidity in the ferrous futures market — having the forward curve available on lme.com will increase transparency and allow anyone to access it and build interest," Stemcor's managing director for Europe Julian Verden told Argus.
The exchange has also started a liquidity programme between 16:00 and 16:30 GMT, again to boost liquidity and transparency of its ferrous contracts. On Wednesday, 1,720t of cfr Turkey scrap traded in the window, following 1,650t the previous day, with volumes for Wednesday reaching about 30-35,000t.
The 30-minute liquidity window is designed to mirror trading in person in the exchange's famed ring.
