LONDON Italian copper
fabricator KME Group SpA and its customers have not seen an
improvement in credit conditions in the European market over
the past year, according to chief executive officer Riccardo
"If you take Spain, for example,
the risk premium today is actually higher than it was a year
ago," Garrè said on the sidelines of the 26th
International Copper Conference in Madrid sponsored by
AMM sister publication Metal Bulletin.
"Companies in the building industry dont have cash and
banks wont provide credit, so they still dont have
the oxygen they need."
Speaking earlier during a panel
discussion with executives from Aurubis AG, Freeport-McMoRan
Copper & Gold Inc. and Corporación Nacional del
Cobre de Chile (Codelco), Garrè called on producers to
share the burden of providing credit to industrial copper
consumers, reiterating a plea he and other fabricators made at
last years conference. At the time, miners responded by
warning that offering credit would divert investment away from
the capital-intensive business of exploration and
The constriction in credit was
particularly acute in late 2011 and early 2012, when
international banks reined in lending to European institutions
due to fears about stability in the eurozone, creating a
critical shortfall in dollar funding.
Trade finance banks are
expanding their business in Europe once again after largely
withdrawing between late 2011 and early 2012, as Natixis Global
Asset Management SA told Metal Bulletin recently.
But while they are
re-establishing lines with physical traders, copper end users
have not seen any easing in bank credit lines and remain
reliant on the payment terms provided by suppliers, such as
"It may be that we dont
see the effect downstream yet because we still dont have
the right conditions in terms of performance. Maybe in the
second quarter the seasonal effects on activity in the market
will fade and we will see an improvement, but I havent
seen any sign of it yet," Garrè said.
A version of this article was first published by AMM sister
publication Metal Bulletin.