Copper Ingot Premium Keeps Over US$ 100/t

Copper ingot premium at spot transaction keeps as high as around US$ 120 per tonne level in Asian market. Chinese demand decreased by around 20% from the peak in April and May but the premium level is much higher than around US$ 65 for 2009 shipment by Corporaci?n Nacional del Cobre de Chile (CODELCO). Under the high level spot premium, CODELCO’s premium could reach US$ 100 again for 2010 shipment.

The premium, which is added on market price of London Metal Exchange, is sellers’ extra revenue for smelters and trading firms. The premium reached as high as US$ 150 per tonne temporarily in April-May due to strong buy from China.

Copper ingot supply is balanced but the buyers can buy only minor brands of ingot at less than US$ 100 per tonne of premium. The limited ingot supply supports the more than US$ 100 premium due to tight supply of copper ore and scrap. Japanese smelters also have limited additional capacity due to planned maintenance outage by Sumitomo Metal Mining, Pan Pacific Copper and Mitsubishi Materials.

The ingot demand is firm mainly in China when the country expands the investment in rail network and power supply network. Japanese demand also recovers to 70-80% of the peak level.