NEW YORK Discounts for copper scrap were largely unchanged March 27, as solid demand continued to be overshadowed by a worsening supply outlook.
"Everyone I talk to across the country says flow is really low," one scrap trader said. "There seems to be a lot of uncertainty about when a steady supply of material will return."
Others said that the European economic crisis had caused declines on Comex and supply shortages in secondary markets. "I dont care what the U.S. stock market is doing; there are serious global issues that need to be resolved," a second trader said.
Brass ingot makers No. 1 copper scrap was the only grade to register a change in its discount, falling to 15 to 17 cents per pound below Comex from 17 to 19 cents previously. That put prices at about $3.27 to $3.29 per pound based on a March 27 Comex copper price of $3.4435 per pound for May delivery.
"Volume is down, which is why spreads are coming in," a third trader said. "Between a slow market and lack of flow, youve got a pretty tough environment to do business." Supply concerns would "likely be a major topic of discussion at the upcoming ISRI (Institute of Scrap Recycling Industries) convention."
Meanwhile, most brass scrap prices strengthened March 27, with market participants noting that consumers were adopting aggressive pricing strategies in order to acquire adequate amounts of material.
"Mill demand is pretty good, and melt shops seem to be hungry to buy what little we have to offer," a brass scrap trader told AMM. "Prices are good because nobody has any metal to sell."
Prices for red brass scrap rose to $2.67 to $2.70 per pound March 27 from $2.65 to $2.68 a week earlier, borings and turnings increased to $2.65 to $2.67 per pound from $2.63 to $2.65 and radiators inched up to $2.27 to $2.30 per pound from $2.26 to $2.29.
"Sure, prices are picking up, but volumes are down 25 percent because of (the) supply shortage," a second brass scrap trader said. "We are fighting to keep volumes up so we can keep operations running."
All other secondary grade prices were unchanged.