Copper consumers mull contract renegotiations

Mar 19, 2013 | 04:06 PM | Suzy Waite

Tags  copper, copper premiums, copper cathode, JPMorgan Chase, BlackRock, spot, contracts, LME London Metal Exchange

NEW YORK — Low copper cathode spot premiums have encouraged consumers to consider renegotiating their 2013 contracts, sources said.

AMM’s spot copper premiums decreased to 4.5 to 5.5 cents per pound on Feb. 12 from 5 to 6 cents previously.

One consumer told AMM that he locked in 2013 contracted material at higher numbers than those available in the spot market currently, putting spot material at a premium of 5 cents per pound.
“We’re seeing some pretty low premiums, and the metal we’ve locked in on annual (contracts) is higher than what’s on offer for spot,” the consumer said. “So we’re looking for opportunities to buy some spot and get out of our contracts, or at least decrease the quantities. If there’s cheaper (metal) out there, why buy the expensive material?” ....

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