NEW YORK Copper consumers have stopped buying spot material for the year and few long-term orders have been placed for 2013, according to traders.
"Consumers are flat for November and December, and we dont see any new business coming for the rest of the year," a trader told AMM.
Copper premiums have decreased to 5 to 6.5 cents per pound from 5.5 to 7 cents previously, with little business reported and the high of 7 cents per pound deemed no longer achievable.
"Premiums are a little softer," a second trader said. "I dont think anyone can get 7 cents anymore."
Consumers are less willing to buy extra material, given the level of uncertainty going forward, sources said.
"Theres a number of reasons: theres uncertainty premiums-wise, theres the fact that on the fabricator side nothing has been done yet and theres still a bit of uncertainty over the economy," a third trader said.
Stocks in London Metal Exchange-listed warehouses in New Orleans rose by 1,000 tonnes Tuesday as market participants found few other homes for material.
"Most of the copper that is going into warehouses is imported, so it would make sense that its going into New Orleans as its near the port," the first trader said.
The lack of uncertainty has extended to next years contracts. "We havent seen any business for the first quarter. I think consumers are looking to buy less on contract for next year and more spot," the first trader said.
"Most of the traders are in the same position," the second trader said.
More contract business has usually been booked by this time of year following the American Copper Councils fall meeting, which took place in Fort Lauderdale, Fla., in mid-November, usually kicking off the mating season domestically.
"There was a lot less done at ACC this year," a fourth trader said.
The inaugural Cesco Asia Week in Shanghai this past week could be behind consumer hesitancy to book forward business, a fifth trader said, who was still hopeful of locking in some forward contracts with customers over the next two weeks.
Traders previously had been hopeful of a pickup in business after the presidential election.
"First the excuse was the election, now its the fiscal cliff," the fourth trader said. "All Im getting is No, not interested. "
Copper prices on Comexs most actively traded contract settled above $3.60 per pound Thursday, which could lead to further delays in purchasing as the market waits to see if it can be sustained.
"No one wants to be the first to say a number for next years premiums. (Chiles Corporacion Nacional del Cobre de Chile) announced their premiums for Europe and Asia, but no one knows what it is for the U.S. Consumers want some direction first," the fifth trader said.