NEW YORK Copper scrap discounts have tightened over the past week due to a combination of weakening terminal markets and an ongoing supply crimp, sources told AMM.
The discount for brass mills No. 1 copper scrap narrowed to 3 to 5 cents below Comex compared with a 4- to 6-cent discount a week earlier, putting prices at $3.28 to $3.30 per pound, based on a May-delivery Comex copper contract settlement price of $3.333 per pound April 3.
The Comex price is down 3.2 percent from $3.4435 per pound a week earlier and 4.8 percent below the $3.5015 per pound seen a month earlier.
We are working on very short supply right now. We can almost name our price if we have material to sell. ... Things are that tight, one trader said.
The discount for refiners No. 1 copper scrap decreased to 12 to 14 cents from 14 to 16 cents previously, putting prices in a range of approximately $3.19 to $3.21 per pound; and refiners No. 2 discounts tightened to 30 to 32 cents, or $3.01 to $3.03 per pound, from a 31- to 33-cent discount March 27.
Discounts for brass ingot makers No. 1 bare bright tightened to 6 to 8 cents below Comex, putting prices at $3.25 to $3.27 per pound, vs. a 6- to 9-cent discount previously; and those for No. 2 fell to 30 to 34 cents, or $2.99 to $3.03 per pound, from a prior discount of 31 to 35 cents. Light copper moved to a 40- to 44-cent discount from 44 to 47 cents, putting prices at $2.89 to $2.93 per pound.
Buyers have limited their purchases in the belief that terminal markets will decline further, sources said.
Consumers are buying only what they need to fill their immediate requirements, a second copper scrap trader said, adding that he felt buyers were hesitant to purchase extra supply because of a prevailing sentiment that markets would continue to trend downward.
A lot of people played the copper hand over the last two years and now they are out, a third trader said. Market sentiment is with equities, not with metals. I think the second quarter is going to be a real downer in both primary and secondary copper markets.
Meanwhile, prices for some grades of brass scrap fell as participants said declines in primary copper and primary tin were beginning to take a toll on the secondary market.
Prices for red brass (No. 1 composition solids) fell 2 cents to $2.65 to $2.68 per pound from $2.67 to $2.70 per pound, while borings and turnings also weakened by 2 cents to $2.63 to $2.65 per pound from $2.65 to $2.67 March 27.
Meanwhile, Comex copper prices recovered slightly April 4, with the May contract inching up 0.6 percent to $3.3515 per pound.