NEW YORK Copper scrap discounts are approaching range highs as Comex price logs gains, likely due to the Federal Reserves decision to maintain its stimulus program, market participants said.
"I dont think scrap is getting cheaper, its just that when the price goes up theres more upward pressure on the (discount)," one copper scrap broker told AMM. "Its a response to the (Federal Reserve) not doing anything. We anticipated they would be buying less, but since theyre not doing anything its positive for the market."
The Comex copper contract for December, the most actively traded, rose to $3.347 per pound Sept. 19 from $3.2785 per pound a day earlier.
Most copper scrap discounts remained within the previous ranges but at the higher end, while brass ingot makers scrap No. 1 discounts rose to 12 to 14 cents from 10 to 13 cents previously, putting the price at $3.21 to $3.23 per pound.
Prices for red brass (No. 1 composition solids) rose to $2.48 to $2.52 per pound from $2.45 to $2.49 last week, traders and sellers said. Red brass borings and turnings increased to $2.45 to $2.48 per pound from $2.42 to $2.45 previously.
Most domestic consumers dont need red brass scrap, but those with contracts for export products might be willing to pay up to $2.57 per pound, market sources said.
While the Federal Reserves decision to maintain the stimulus is a positive sign for the market, participants said the sluggish economic recovery is still hurting their business.