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Europe Metals Premiums Steady, Chinese Demand Eyed

iconJun 13, 2011 10:57
Source:SMM

LONDON, June 10 -- Premiums for physical metals in Europe remained little changed in the past week, with traders eyeing the return of top consumer China.

The premium for copper in Rotterdam CU-GA-ROT, paid above the London Metal Exchange (LME) cash price CMCU0, was at around $75-85 a tonne versus $70-80 in late May, traders said.

"We've had premiums firm, but there's not much demand. It will likely remain quiet until the end of the summer," a trader said.

Another trader said business had improved slightly. "Premiums have strengthened a bit; May was up from April."

The first quarter was weak for physical copper demand, while top consumer China did not follow its usual pattern of striding back into the market after its Lunar New Year break in February.

China's copper imports fell 3 percent in May, but traders said extra bookings would raise June arrivals.

"I think slightly lower prices have made them (Chinese buyers) more interested," the first trader said.

Benchmark LME copper CMCU3 was at $9,012 a tonne at 0939 GMT. In output news, production should return to normal in days at the world's No. 5 copper mine, Chile's El Teniente, after a strike that seems near its end, the company said.

Premiums for duty-paid physical aluminum AL-WDP eased from record highs in recent weeks to $205-235 a tonne over LME cash prices CMAL0, compared with quotes of $210-240 in May, traders said. Premiums for duty-unpaid AL-WDUP material were quoted at $140-150 a tonne.

Inventories of aluminum hit a record high of 4.71 million tonnes in May but have since started to soften.

"Although spot premiums have recently eased a little, the spot market remains very tight," VTB Capital said in a note.

Traders quoted tin premiums for Chinese material SN-CN at $500-$600 a tonne versus $450-600 last week, and standard-grade Malaysian tin SN-MY at $350-550 a tonne versus $325-475.

"People say there is some tightness, but it's short-lived. I don't think it will have a long-term effect," a trader said.
 

Aluminum Al
copper Cu
premium/discount
tin Sn

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