The London Metal Exchange's steel scrap futures contract traded sharply higher Friday morning, despite a large fall in the underlying physical assessment Thursday.
October traded at $313/mt on LME Select at 10:13 am London time.
The underlying Platts TSI assessment of Turkish deepsea HMS I/II (80:20) imports has averaged $305.28/mt so far this month, following the $57.50/mt fall over September.
The assessment dropped $7.50/mt Thursday on the back of Baltic offers at $310-$315/mt CFR, which were not being lifted by buyers.
November traded at $323/mt on LME Select at 1017, up $14/mt on Thursday's close, before slipping back to $317/mt, still up $10.50/mt.
December traded at $320 as of 1031, up $8/mt on the previous close, while January printed at $317/mt on Select at 10.12, up $9.
Sources said rocketing Chinese futures had filtered into more bullish sentiment on the LME, despite the physical markets for scrap and rebar both looking uncertain.
Chinese futures soared on the back of impending steelmaking production cuts and strong Chinese imports in recent months: despite steelmaking cuts likely dampening demand, iron ore and coal futures gained sharply Friday.
The Turkish scrap assessment bounced back from below $300/mt earlier this month to $315/mt on the back of US sales, before softening Thursday as Baltic producers lowered offers and Turkish mills went quiet.
On Friday a trade was reported between a Swedish merchant and Iskenderun-based EAF, with HMS I/II (80:20) at $311/mt CFR.
The trade was for mid-November loading, done Tuesday, according to sources on the buy- and sell-sides.
