Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The Davis Index for brass scrap was higher by 1-4¢/lb for most grades on Friday as volatility returned to the exchange markets.


The Comex spot market reverted to its unpredictable behavior this week after a steady increase for almost a month. Copper prices on the Comex increased by 40¢/lb between June 16 and July 13, recording only one down day of 1¢/lb in a stretch that ended with July 13’s close at $2.96/lb. 


Since then, the market has lost 7¢/lb, rebounding slightly to close on July 16 at $2.90/lb, before dropping again to close the week at $2.88/lb on Friday.


The spreads normally start to widen more during such a significant run, but better demand from the brass sector has firmed up both the traditional copper spreads and the C-200 series spreads, both of which widened by less than a penny for brass grades on the Davis Index. 


However, flows are weaker by 50pc or more compared to July 2019, despite better scrap flows over the past month, which is the main reason spreads have not moved much even against low demand.


The weekly Davis Index for 360-rod borings increased by 3.2¢/lb to $1.923/lb delivered US consumers and moved higher by 4.3¢/lb for brass radiators to $1.679/lb delivered US consumer. The index for red brass (85:15) solids rose by 10.3¢/lb to $2.53/lb delivered US consumer.


The weekly Davis Index for the C-200 series alloy copper spread was wider by 0.1¢/lb at 6.6¢/lb under the Comex spot contract, while the C-200 series zinc spread was wider at 3.7¢/lb under the LME zinc spot contract, weaker by 0.4¢/lb.


The Comex cash copper contract was lower by 2¢/lb at $2.88/lb on Friday down from $2.90/lb on July 10, while the spot LME zinc official contract increased by $54/mt on Friday to $2,200.50/mt from $2,145.50/mt on July 10.


Pricing for copper and brass scrap should level off now that the bull run on Comex has ended. Consumers will be carefully observing scrap flows to gauge suppliers’ sense of the market peaking because the latter may look to unload material they have been holding and flood the market with more material than it needs, forcing the spreads to widen further.

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