The first U.S. ferrous scrap futures contract, launched by CME Group in September, is gaining traction as participants test the waters with modest trades, American Metal Market reported recently.
About 4,400 tons, or 220 contracts, were traded in October, up from 1,320 tons in September. For this month through November 28, 3,500 tons traded, with open interest at 152 contracts, according to CME Group data.
The volume figures offer positive signs for the new hedging tool, indicating that market participants are hedging small busheling quantities of 20 to 100 tons to try the contract out, CME Group officials say.
"This is actually very good considering this is a very new market," Youngjin Chang, CME Group’s director of metals research, said at AMM’s 6th Annual Steel Scrap Conference in Philadelphia earlier in November. "We see this as a very positive sign for growth."