Incentives unhealthy for copper: Codelco chief

Apr 10, 2013 | 01:04 PM | Andrea Hotter

Tags  Thomas Keller Lippold, Codelco, copper, warehouses, New Orleans warehouse, Antwerp warehouse, Johor warehouse, Andrea Hotter

SANTIAGO, Chile — Incentivizing copper’s movement into London Metal Exchange warehouses for financing deals is unhealthy and doesn’t reflect the underlying market fundamentals, Corporación Nacional del Cobre de Chile (Codelco) president and chief executive officer Thomas Keller Lippold said.

While producers might see short-term benefits in higher premiums, delays in accessing material in warehouses due to long queues are also not a healthy situation.

"In the longer term, I don’t think it’s a good thing for the industry that there are quasi-artificial incentives that don’t let the underlying market conditions fully express themselves in terms of prices," he told AMM. "It’s not very healthy that it takes four to five months to take material out of the market—that is not a reflection of a well-functioning market." ....

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