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
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
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