NEW YORK The copper cathode spot market has ground to a halt, earlier in the seasonally slow summer period than expected, according to traders.
AMMs premiums for copper cathode held at 7 to 9 cents per pound June 12, with few transactions reported as consumers chose to sit out of the spot market.
Demand, which is typically busy through the end of June, has eased off early, a trader told AMM. "Its supposed to be pretty busy through June for a couple of weeks as they buy for the fall. We havent seen that. People are not asking (for material)," he said.
Even lower copper prices have failed to lure buyers back to the market.
Comex prices dropped to $3.193 per pound June 11, the lowest level since May 2 when it traded at $3.1045, although prices recovered slightly June 12 to $3.2255 per pound. The drop in Comex prices took some physical market participants by surprise (amm.com, June 10).
"I dont see (the low price) having any impact," the trader said. "Demand is pretty crappyits just a lack of business."
A second trader called the market "abnormally quiet," while a third said that "business is not good and theres nothing we can do about it."
Traders had expected spot demand to be better following the wall slide at Kennecott Utah Coppers Bingham Canyon Mine in April, but with Kennecott managing to fulfill its contractual obligations for June (amm.com, May 29) and supply coming in from overseas, theres little extra demand around, market participants said.
"Kennecott produced 25 percent of copper in North America," a consumer source said. "We cant get material out of (London Metal Exchange-listed) warehouses so we had to make contracts overseas."
A fourth trader said his company had got out of copper cathode altogether due to the lack of activity and opportunities in the copper scrap market. "My impression is that people are trying to buy No. 1 (copper scrap), plus its the summer and the shutdowns are starting soon," he said. Larger companies are better able to weather the current market conditions and can get larger amounts of copper at lower prices, he added.