SINGAPORE Asian copper
premiums are likely to keep rising as Indias largest
copper smelter remains closed.
smelter, operated by Vedanta Resources Plc subsidiary Sterlite
Industries India Ltd., was shut down in late March after area
residents complained that plant emissions caused them to have
An expert panel that inspected
the plant had been expected to present its report to a
fast-track environmental court in Tamil Nadu state April 29.
But in a surprise development, the judge said that the sealed
report would instead be sent to a court in New Delhi.
"We expected some result (April
29)," P. Ramnath, chief executive officer of the Tuticorin,
India-based companys copper business, was quoted as
saying in a Reuters report.
"Traders had expected the
smelter to get clearance (to reopen) with conditions, but now
that (the date) has been shifted it will have a big impact on
the market," a trader in Singapore told AMM sister
publication Metal Bulletin. "It will get resolved, but
not for another 15 days is my wild guess. ... If this is going
to continue, then premiums are going to continue to rise."
Copper premiums in Singapore
rose to $60 to $75 per tonne last week, up from $30 to $50 per
tonne at the end of March. Shanghai premiums have gone to $130
to $140 per tonne from $60 to $90 per tonne in the same
Wire rod premiums would also
rise, another market participant said, noting that Indian
producers use Sterlites copper cathode to convert into
wire rod. "We buy copper wire rod at premiums of $225 to $250
over (London Metal Exchange) cash price. ... In India, these
may rise (even further)," he said. "The wire rod premiums to
India may rise by $20 in the near term."
Other market participants
believe that the queues created in Johor, Malaysia, are pushing
"The higher premiums are going
to last for the next couple of weeks in May and may go up, as
there is a problem in getting material out of some warehouses
such as Johor due to the incentives," a third trader in
A version of
this article was first published by AMM sister publication