NEW YORK With the federal governments introduction of a series of low-lead initiatives, brass ingot makers are analyzing the long-term viability of several grades of brass scrap, including No. 1 composition solids, or red brass, and radiators.
The Reduction of Lead in Drinking Water Act will go into effect at the beginning of 2014 (amm.com, Jan. 15) in conjunction with the National Clean Water Framework, which the Obama admisitration launched April 27, 2011.
Several sources said that the shift to low-lead material could signal a major change in flow of material. "I have been buying red brass and radiators for the past 40 years; it has always been the standard ingot makers diet," one ingot maker told AMM, noting that players within the industry have dubbed the various low-lead initiatives as "ObamaWater."
"Recently, in the past six months or so, 8 to 10 percent of our business has been no lead, largely because of new laws in California. That number will only continue to grow in the coming years and months," he said.
The change will affect all aspects of the supply chain, including scrap suppliers, a second ingot maker said. "I have been talking to dealers and have had to tell them that I am not going to need as much red brass and radiators. I have to dream up ways to not hurt dealers feelings and tell them gently that I may not want to buy from them anymore."
Sources said the new initiatives will probably erode prices for red brass and radiators over time. "Just because a politician doesnt like the word lead, things have to change. Its ridiculous," a scrap dealer said. "There are thousands of years of work involved in some of these alloys and now they are just going to say you cant make it anymore. It doesnt make any sense."
A third ingot maker said he was preparing to move to a "no-lead" business model. "We have to be prepared to ship no-lead brass," he said, adding that his shipments of no-lead products have quintupled in the past six months. "Consequently, red brass and radiators will continue to suffer."
Despite the negative market sentiment, prices for both grades held steady Nov. 6, with red brass unchanged at $2.45 to $2.49 per pound and radiators firm at $2.13 to $2.15 per pound.