Copper and Brass Fabricators Council Expresses Need for Regulatory Action to Address Price Volatility in Copper Markets
WASHINGTON, March 25 /PRNewswire-USNewswire/ -- In a public meeting held today by the Commodity Futures Trading Commission ("CFTC"), Jeffery Burghardt, Vice President of North American Metal Procurement and Global Utilities of Luvata Buffalo, spoke on behalf of the Copper and Brass Fabricators Council ("Council") regarding the unprecedented volatility in prices for copper over the last several years. The CFTC set this public meeting to examine futures and options trading in the precious and base metals markets and focused on trading in gold, silver, and copper.
In his remarks, Burghardt noted that the price of copper has risen by more than 100 percent since the end of 2008 even though the quantity of copper stored in warehouses also increased substantially over the same period. "By all rights," Burghardt observed, "the greater supply of available copper should have led prices to decline rather than more than double. The Council believes that the explanation for this counterintuitive pricing lies in investment firms' large positions in the markets. What the Council seeks is lower volatility and market prices that reflect over time the real demand/supply situation, not the excesses of speculation."
In materials released prior to the public meeting and during the meeting itself, the CFTC questioned what would happen if it were to establish position limits for metals markets. In response, Burghardt stated that the Council shares the goal of limiting the impact of investment funds in the commodity markets, but believes that position limits would be very challenging to implement effectively. Instead, Burghardt said, "The Council submits that a better means to the end will be to raise the initial margins required for investment firms. The system for initial margins is already in place and in use, will allow for flexibility in changing the amount of the initial margins as circumstances warrant, and will be much easier to monitor and control than position limits."
In expressing the Council's appreciation and support for the CFTC's willingness to tackle this issue, Burghardt stressed the importance of futures markets for the Council's members in establishing prices and managing the price risks that copper and brass mills face. "We only use futures markets as necessary in our day-to-day business to hedge our price risk, and it is critical we can do this in a cost-effective manner."
About the Copper and Brass Fabricators Council
The Copper and Brass Fabricators Council, Inc. ("Council"), is a non-profit membership trade association that dates from 1964. Membership is open to any person, firm, or corporation engaged in the fabrication or production in the United States of products made, in whole or in part, from copper or copper alloys. The Council's member companies generally are engaged in the production of copper and copper alloy sheet and strip, rod and bar, plumbing tubing, OEM or air-conditioning tubing, wire, extrusions, shapes and profiles, forgings, and fittings. These products are used chiefly in the automotive, construction and electrical/electronic industries. The Council's eighteen member companies produce over 80 percent of all copper and brass mill products produced in the United States. The Council's list of members is attached.
COPPER AND BRASS FABRICATORS COUNCIL, INC.
MEMBERSHIP LIST
March 22, 2010
BRUSH WELLMAN, INC.
Mayfield Heights, OH 44124
CAMBRIDGE-LEE INDUSTRIES, INC.
Reading, PA 19612
CERRO FLOW PRODUCTS, LLC
St. Louis, MO 63166-6800
CHASE BRASS & COPPER COMPANY,
INC.
Montpelier, OH 43543
CHICAGO EXTRUDED METALS
COMPANY
Cicero, IL 60804
DRAWN METAL TUBE COMPANY
Thomaston, CT 06787
HEYCO METALS, INC.
Reading, PA 19605
HUSSEY COPPER LTD.
Leetsdale, PA 15056-1099
KOBE WIELAND COPPER PRODUCTS,
LLC
Pine Hall, NC 27042
LUVATA NORTH AMERICA, INC.
Buffalo, NY 14240-0981
METALS AMERICA
Shelby, NC 28150
THE MILLER COMPANY
Meriden, CT 06450-1010
MUELLER INDUSTRIES, INC.
Memphis, TN 38125
NATIONAL BRONZE & METALS, INC.
Houston, TX 77280
OLIN BRASS
East Alton, IL 62024-1174
PMX INDUSTRIES, INC.
Cedar Rapids, IA 52404-4303
REVERE COPPER PRODUCTS, INC.
Rome, NY 13440-5561
WIELAND METALS, INC.
Wheeling, IL 60090
SOURCE Copper & Brass Fabricators Council, Inc.
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