Japan Smelters and Fabricators to Conclude 2008 Copper Contracts

Japanese copper smelters and domestic copper users, including electric cable makers and copper alloy product makers, are likely to conclude price negotiations within this month on one-year purchase contracts for electrolytic copper shipped in January-December 2008. Fabricators approved extra charge at 700-1,000 yen per tonne which is put on London Metal Exchange copper price. Smelters’ offers for extra charge were almost fully adopted.However, smelters’ ingot selling price will decrease by several hundred yen in 2008 compared with 2007 despite of 700-1,000 yen extra charge. The reason is that premium was decreased by around US$ 13 per tonne for 2008, which is also put on LME copper price, since CODELCO of Chile lowered its premium against Japanese copper fabricators by US$ 13 for 2008.CODELCO announced the firm decreased its premium by US$ 13 per tonne against Japanese copper fabricators in autumn 2007. Japanese smelters followed the international indicator by CODELCO and decreased their premium by about 1,300 yen per tonne for 2008 shipment.Severe negotiations have been held between Japanese copper smelters and fabricators on extra charge. Copper smelters offered extra charge hike to cover higher distribution and interest costs caused by upsurge of oil and copper markets.