NEW YORK U.S. copper
cathode premiums have soared in the aftermath of a wall slide
at Kennecott Utah Coppers Bingham Canyon Mine.
AMMs spot copper
cathode premiums rose to a range of 6 to 8 cents per pound on a
delivered basis May 1, up from 4.5 to 5.5 cents previously.
Quotes for spot material rose
soon after the April 10 wall slide (
amm.com, April 17), but most consumers held back
from buying until more information about the situation was
available. Kennecott declared force majeure April 16,
saying it did not expect to be able to make shipments from June
While purchases since have been
scarce, anyone who must buy will have to pay higher premiums,
consumers and traders confirmed.
Several traders reported hearing
of sales of copper cathode at 9-cent and 10-cent premiums, but
AMM could not confirm any such transactions in the
The situation at Kennecott, a
lack of scrap, long queues for material in London Metal
Exchange-approved warehouses and strikes in Chile have
conspired to push premiums higher, one trader said.
"Premiums were, say, 5 cents or
thereabouts before the problem at Kennecott Utah Copper. Offers
for copper in the United States on a delivered basis over the
past 10 days are from 7 to 8 cents plus," said the trader, who
had transacted at the higher numbers.
Copper stocks in LME-approved
warehouses in the United States totaled 203,950 tonnes May 1,
but consumers and traders said that most of the material is not
"I cant recall a time when
most of the available stocks were paralyzed," a second trader
"Things have been squeezed.
Domestic copper is tight," said one consumer source, who paid a
premium of about 6 cents per pound to secure material in recent
Several traders told
AMM that they had no available spot material, having
previously opted to sell what copper they had into LME-listed
stores in exchange for the incentives being offered by
"The only material I would have
is coming from Chile, so the earliest I could deliver to anyone
here is July," the second trader said.
Comex copper stocks totaled
85,799 short tons May 2, and data showed that inventories had
risen in New Orleans stores following a 1,000-ton delivery.
A recently announced copper
surcharge by Cedar Rapids, Iowa-based PMX Industries
Inc.which had sourced almost all of its cathode from
Kennecottalso spurred the increase in copper premiums,
market participants told AMM (
amm.com, April 30).