Codelco offers 2023 copper supply to European clients at higher premium, sources say

Chilean state-owned copper producer Codelco has made a premium offer in the low- to mid-$230s per tonne to its key European clients for 2023 supply, sources have told Fastmarkets

The figure – which is charged on top of the London Metal Exchange copper price – marks an increase of approximately 80% from the premium of $128 per tonne that the world’s largest copper producer offered its European clients for 2022 supply.

An official offer is yet to be delivered to the rest of Codelco’s European clients, Fastmarkets understands. A commercial representative at Codelco said the producer would not disclose commercial details to the public and declined to comment on an inquiry from Fastmarkets regarding premium levels.

Two sources close to the matter told Fastmarkets on Thursday October 13 that the increase in the annual premium level was mainly due to rising costs in logistics and operations.

Codelco’s most recent offer is also higher than the $228-per-tonne level offered by German producer Aurubis for 2023 supply, which itself marks an increase of 85% from Aurubis’ offer of $123 per tonne for 2022 supply.

Upper hand

Copper producers could have the upper hand in 2023 negotiations with the European market expected to tighten once more long-term contracts for Russian units expire at the end of 2022, and with many participants showing caution in financing Russian metal next year.

Germany, the Netherlands and Turkey are traditionally major destinations for Russian cathode.

Spot copper cathode premiums in Europe rose to historic highs in the aftermath of Russia’s invasion of Ukraine in February but have since retreated.

Fastmarkets most recently assessed the copper grade A cathode premium, cif Rotterdam, at $50-100 per tonne on October 4, down from a high of $85-125 per tonne on July 26.

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