LONDON Copper premiums in
northern Europe jumped at the start of this week as sellers
boosted their offers in line with incentives of up to $100 per
tonne offered by traders and warehouses to draw copper into the
Belgian port of Antwerp.
Rotterdam copper premiums
published by AMM sister publication Metal
Bulletin rose to $60 to $100 per tonne March 11, where
they remained as of March 13. Thats up from $50 to $90
per tonne March 8, as traders and producers said that they were
quoting and booking in line with incentives offered in London
Metal Exchange warehouses in Antwerp.
The weighted average premium
stood at $75.77 per tonne, up from a low of $57.50 in late
"We dont sell to
warehouses, but we have spot material that we sell to
merchants. The ones that can do these warehouse deals are
offering better premiums than a consumer," one producer source
said. "For me, it doesnt make sense to sell to a consumer
at $60 (per tonne) in Rotterdam when I can get $100 from the
merchants. At the moment, the premium in northern Europe is the
warehouse incentive in Antwerp."
Consumer activity remained
dormant, particularly at the lower levels that physical copper
users have been able to achieve until recently.
"Less than a couple of weeks ago
I could buy spot material at $65 (per tonne), but it appears
the situation is different today," one semifabricator source
said. "It just shows how quickly things can change in the
Consumers will increasingly have
to compete with warehouse incentives in order to book material,
as they now do in the aluminum market, sources said. But unless
the queues in locations such as Antwerp get longer, premiums
will only push above those incentives in response to
traditional drivers, such as Chinese restocking or higher
cathode demand caused by a shortage of scrap.
"Weve seen already in
these past few weeks that scrap supply has decreased as a
result of lower prices, and there are signs that some of my
colleagues are having to replace scrap with cathode," the
semifabricator source said.
A version of this article
was first published by AMM sister publication Metal