The London Metal Exchange's scrap curve lurched lower Tuesday morning further into backwardated territory.
August traded at $340/mt on LME Select, down $6 from Monday's close and substantially below The Steel Index's underlying reference price of $354/mt CFR Iskenderun Monday.
The LME's contract is cash-settled against the monthly average of TSI's CFR Turkey price.
September initially printed at $346/mt on LME Select during the London morning, before softening to $342/mt, down $6 from Monday's close.
October initially traded at $338/mt for 10 lots on Select before slipping to $336/mt, off $8 from Monday's close.
November traded at $333/mt initially then slipped to $328/mt, down $9 from Monday's close.
December was off quite heavily at $318/mt, down $14 from Monday, while January slipped $5.50 to $310/mt and February $9.50 to $304/mt.
By midday London time 1,380 lots had been traded over LME Select, compared with 1,227 for Monday's entire volume.
A trader using the contracts attributed the softening to China's weakening futures, with Shanghai Futures Exchange rebar falling after the exchange raised fees -- the China Iron & Steel Association also spoke out last week suggesting steel price rises were exaggerated and based on a "misinterpretation" of production cuts.
The trader said the run-up in Turkish rebar, which had allowed the mills to pay more for scrap, was based on the upward swing in China.
The LME's rebar contract also traded lower Tuesday.
September was trading at $525/mt, in line with S&P Global Platts underlying reference price for Monday.
October traded at $516/mt, down $4 from Monday, while December was $6 lower over the same period at $509/mt.
