US weekly brass scrap spreads tightened by around a penny on Friday on strengthening demand as well a fall in Comex copper prices.
The Comex spot copper contract declined by 16¢/lb to close at $4.51/lb on Friday, while the spot LME zinc official cash contract increased by $57/mt to $2,981/mt today. LME Zinc prices had touched a record high of $3,000/mt earlier in the week before correcting down to the current levels.
Buyers are returning to the brass market in anticipation of a decline in prices after Comex copper and LME zinc dropped from record highs this week and robust demand for brass. Brass spreads have also begun tightening in tandem, with the weekly Davis Index for C-200 series alloy’s copper spread narrowing by 1.9¢/lb to 12¢/lb under the Comex copper spot contract, while the C-200 series zinc spread, tightened by 1¢/lb to 5.5¢/lb under the LME zinc cash contract.
Transaction prices, however, remained unchanged for the most part this week as sellers tried to gauge demand for brass, which has trended stronger than copper throughout May. The weekly Davis Index for 360-rod borings held unchanged at $3.14/lb delivered US consumer as did Brass radiators at $2.587/lb delivered. Red brass solids were flat at $3.281/lb delivered despite a shortage of red brass grades.
Still, participants are challenged by high freight costs and labor shortages, which could subdue trade sentiment despite strengthening demand and limited supply of some brass grades.