NEW YORK A Chilean port
dispute and copper scrap tightness could push copper cathode
premiums up in the next few weeks, traders and consumers told
Spot copper cathode premiums
remain between 4.5 and 5.5 cents per pound but market
participants expect them to increase, pointing to an ongoing
strike at the Chilean ports of Angamos, Antofagasta, Inquique
and San Antonio (
amm.com, March 28).
Traders with material waiting at
Chilean ports said the strike is already pushing back
deliveries, and if the dispute is prolonged premiums will
undoubtedly get a boost, particularly as copper demand
continues to improve in the spring.
"Theres a good chance
premiums will pick up," one trader told AMM.
A second trader confirmed that
the Chilean port strike is delaying deliveries globally, noting
that he has not yet received his March material. He said it
wont be long until these delays have a trickle-down
effect on premiums, particularly as the strike enters a "second
week with no signs of going away."
Still, the first trader said he
has seen little evidence of any spot deals being closed at
higher numbers as a result of the port strikes. "(Premiums) are
probably marked higher as a result of whats going on, but
Im not sure much has been traded," he said, pegging
premiums at 4.5 to 5.5 cents per pound.
However, sources said that an
increase is not far off, particularly as demand from wire and
cable consumers improves.
"Business is getting better. The
tube, wire and cable guys are in the market for the spring and
summer," a third trader said.
"Were seeing a little
pickup now that were entering the busy season," a
consumer source said. "And if I had to guess, Id say
premiums would inch up, given they were low recently."
In addition to the port strike
and a seasonal uptick in demand, continued scrap tightness also
should push premiums higher as consumers who normally purchase
scrap are forced to enter the cathode market.
"Scrap is short. Its very
tight, so premiums to buy Grade A (will go up)," the third
"(The lack of) scrap
availability is becoming more dramatic," a second consumer
source said. "That bodes well for people selling cathode.
Ill probably need to buy more cathode on a spot
Traders continued to take
advantage of incentives being paid by warehousing companies to
store material, with 8,275 tonnes delivered into London Metal
Exchange-approved warehouses in New Orleans between March 20
and 27. Copper stocks in New Orleans stood at 569,775 tonnes
March 27, with canceled warrants at 91,375 tonnes.