In-warehouse copper premiums skyrocket

Apr 18, 2013 | 02:30 PM | Suzy Waite

Tags  Kennecott Utah Copper Corp., Rio Tinto, in warehouse premiums, copper, warehouses, LME, London Metal Exchange, Suzy Waite

NEW YORK — In-warehouse premiums for copper at London Metal Exchange-approved warehouses have skyrocketed after an April 10 wall slide at Kennecott Utah Copper Corp.’s Bingham Canyon Mine forced the company to declare force majeure.

Traders told AMM that in-warehouse duty unpaid premiums for material in Chicago, New Orleans and St. Louis locations were being quoted at around $50 per tonne this week and as high as $60 per tonne in St. Louis, up from between $30 and $45 per tonne in St. Louis previously and a far cry from the $5-to-$10-a-tonne range reported in Chicago and New Orleans prior to the mine collapse.
“Ten dollars (a tonne) really has no bearing on today’s market, which is totally different from a week ago. What meaning does $10 have when you’re taking 25,000 tonnes of production out of the system? Don’t be surprised when (premiums) go from $10 (a tonne) when it’s dead to $50 (a tonne) when it’s not,” one copper trader said of in-warehouse premiums. ....

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