NEW YORK U.S. spot copper premiums weakened Jan. 30 in what most traders and consumers described as an "eerily quiet" market.
AMMs spot copper cathode premiums narrowed to a range of 5 to 6 cents per pound from 5 to 6.5 cents previously.
Consumers stocked up late last year and havent needed to purchase spot material yet, sources said.
"Some of our consumers told us to give them a call in March to see how things are going. They didnt seem too optimistic between now and then," one trader said.
A copper consumer who serves the automotive, industrial, energy, consumer appliances and electronics industries confirmed that hes got enough material on hand, but expects things to pick up towards the end of February and the beginning of March.
"Consumers came in prepared, and really know what their downstream demand is (this year)," the trader said.
A second consumer did participate in the spot market this week, purchasing 1 million pounds at a premium of just under 5 cents per pound. "I just picked up some (spot) metal. Its a strong sign to see healthy levels this early in the year," he said in reference to demand.
The copper will be used in produce building wire, supporting analysts forecasts that the U.S. construction market is due for a recovery this year.
While most traders and consumers put the slow activity in the spot market down to the time of year, others said the weakness is more exaggerated than usual.
"Things are slower than you would expect for this time of year. Its just awful right now," a second trader said.
In addition, the approaching Chinese New Year holiday means business has yet to take off in the Far East, a third trader said. "Were in that time of year when China becomes slower because of the holiday coming up. Business is moderately slow. It isnt going down, but its not going up very much."
Although forecasts for the construction and automotive sectors indicate a better year for copper, consumers likely will remain cautious about spot purchases and buy metal only when they need it, sources say.
"We buy as we need," the second consumer said.
"(Consumers are) still going to be skittish and only order what they need. I dont think anyone wants to be caught long," the first trader said.