Discounts for US copper scrap narrow as futures move lower
Washington (Platts)--7Nov2012/829 pm EST/129 GMT
Discounts for copper scrap bought and sold in the US narrowed this week
as COMEX copper futures eased on the back of a stronger US dollar and
pre-positioning ahead of Tuesday's elections.
The Platts spread for No. 2 birch/cliff, the grade consumed mostly by
Chinese mills, narrowed to March COMEX minus 36 cents, delivered FAS, with
many sellers now pricing off the March contract to account for the shipping
Most sources put No. 2 spreads at March COMEX minus 32-38 cents, though
overseas demand had remained "spotty," one Midwestern trader/processor said.
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If Chinese mills wanted to have scrap on the ground before the start of
the week-long Lunar New Year celebrations in early February, then they
normally begin buying in November and December.
But US supplies of No. 2 have remained tight for most of the year.
"Supply is tight, but if you have it, you can sell it," the Midwest
processor/trader said. "I can see someone paying in the low 30s for it."
The Platts discount for mixed loads of No. 1 burnt wire/pipe and tubing
fell to December COMEX minus 20 cents, delivered US, from December COMEX
minus 23 cents the previous week. Sales to US mills are normally priced off
the active COMEX month due to the shorter duration to receive the metal.
Most sources put No. 1 spreads at December COMEX minus the mid-teens to
20 cents, delivered. But demand remains an issue, with some large domestic
mills not taking deliveries until after the new year.
A trader/recycler in the upper Midwest agreed, but said sales could be
made depending on the seller's relationship with the mill. The trader/recycler
said he had made no No. 1 sales Wednesday, but felt the spread was closer to
December COMEX minus 14 cents.
The Platts discount for high-grade bare bright, which has been more
volatile than usual in recent weeks, narrowed to December COMEX minus 8
cents, delivered US.
Ranges for bare bright -- which can be used as a complement to, or
substitute for -- exchange-traded copper cathode, varied considerably. The
upper Midwest trader/processor said sales of bare bright wire still could be
made at December COMEX minus 4-6 cents, the range for most of the summer. But
discounts for bare bright busbar and clips were closer to December COMEX
minus 8-9 cents, delivered.
Most sources put bare bright spreads in the December COMEX minus 8-10
cents range, pointing to the lack of market activity from bigger mills.
--Nick Jonson, firstname.lastname@example.org
--Edited by Jeff Barber, email@example.com