UNITED STATES October 17 2013 8:19 PM
NEW YORK (Scrap Register): Copper stocks are up this year, but the supply comes from copper concentrate and not metal, said Barclays Capital in a research note.
That means once smelters begin producing again, “the refined market could become better supplied, which we expect over the coming months and especially into 2014,”they added.
According to Barclays, Copper-producer margins are under pressure, citing a 10% drop in prices from a year ago, consensus expectations for lower prices again next year and high industry operating costs.
The cash operating cost margins at marginal producers, which they define as at the 90th decile of the cost curve, are the lowest since 2003.
“This has sparked some interest in producer hedging, especially by those producers for whom copper is a by-product. There is selling interest from $7,400/t and above, as producers have lowered their hedging price targets from earlier in the year,” Barclays concluded.