Brisk Pre-Holiday Demand Echoes Higher Copper Premiums, SMM Says

Commerzbank said on Thursday December 2 that it expects that by the end of next year, the copper prices should be trading around $9,500/mt.

Market participants said on Monday that the world’s largest copper miner Codelco will supply copper to Chinese customers with a premium of $105/mt in 2022. This is up 19.3% from this year's $88/mt.

The copper prices surged again after the National Day holiday. The US dollar index fell below 94 from a high of 94.5. The US crude oil prices have jumped to $82/barrel after rising for more than one month, driving a rally in the global industrial product prices. The global copper inventories are at a historical low. The LME copper cash-to-three-month backwardation expanded rapidly to $257/mt after breaking through $100/mt, setting a new high since 2007. LME copper exceed $10,000/mt to a high of $10,300/mt, with a weekly increase of 9.25%.

Sellers are cutting spot deals ahead of upcoming negotiations over next year’s term copper premiums.

Codelco set 2017 copper premiums for term shipments at $68 per tonne to buyers in South Korea, Taiwan and Japan. 

Codelco has decided to slash its 2017 copper premiums to $72 to Chinese buyers, sources reported. 

Three trading sources said Codelco has slashed its 2017 physical copper premiums to around $70 to Chinese buyers, and $80-85 per tonne to European buyers.

SHFE 1606 copper will trade in a tight range of RMB 35,750-36,100/mt on Tuesday.

The London Metal Exchange (LME) three-month copper prices jumped higher to hit the highest level in more than three months.

SHFE 1603 copper opened at RMB 35,480/mt on Wednesday.