MethodologyContact usLogin
Weak demand also weighed on copper premiums in the United States over the period, while the Chinese spot market continued to experience an uptick in activity following improved import terms due to a falling London Metal Exchange price.
The European spot copper market came under downward pressure during the past week, with weak demand and high financing costs providing challenges. Participants also said that the market was notably quiet.
Fastmarkets’ fortnightly assessment of the copper grade A cathode premium, delivered Germany, fell to $180-200 per tonne on Tuesday, down from $190-210 per tonne on August 8.
Anemic demand in Germany put significant pressure on the spot copper market with multiple sources noting that, paired with high financing costs, the weak demand was causing consumers to sell material back to traders. Traders and consumers have noted that in recent weeks a significant portion of liquidity has involved participants selling stock back to traders.
Sources also noted that participants were trying to delay deliveries or cancel tonnages due to them not needing material.
Beyond some examples of traders buying back from customers, the market was said to be quiet and subdued.
“It is fortunate the football season has started again because the copper market is so boring at the moment,” a trader said.
Multiple sources noted that reduced demand for consumer products like cars from China was pressuring the German industry along with weak demand from Europe.
Fastmarkets’ fortnightly assessment of the copper grade A cathode premium, cif Rotterdam, was $110-130 per tonne on Tuesday, unchanged since July 11.
Participants highlighted that Rotterdam usually serves as a market through which copper is imported into Europe, and due to the weak demand in the continent, Rotterdam continues to be quiet.
Fastmarkets’ fortnightly assessment of the copper grade A cathode premium, cif Leghorn, was $130-150 per tonne on Tuesday, unchanged since May 16, with participants continuing to note quiet market conditions.
Sources across Europe struck a particularly sullen tone in this pricing session, with one source going as far as to say the industry felt similar to 2008, in reference to the global recession, and with sources across the industry noting negative sentiment.
A continued area of positivity in the copper industry, however, is the energy transition with sources noting demand in that sector was still relatively strong.
Premiums for copper cathode being imported into China continued to push higher in the week to Tuesday, with units for prompt delivery attracting strong interest, supported by improved import conditions, sources told Fastmarkets.
“Market participants tried to seize the import opportunity when London Metal Exchange copper prices were falling, which usually means a higher chance of an opening of the arbitrage window between the LME and Shanghai Futures Exchange,” a Shanghai-based copper trader said.
The LME three-month copper price was at $8,362.50 per tonne at the 5pm close on Tuesday, rallying from a close of $8,199.50 per tonne on August 15, but down from a close of $8,631.00 per tonne on August 1.
The Shanghai-based trader added that China’s domestic copper spot premium remains elevated, and this adds further incentive for participants to import material, especially prompt-delivery units, to take advantage of the domestic spot high premium.
Fastmarkets’ daily assessment of the benchmark copper grade A cathode premium, cif Shanghai, was $45-65 per tonne on Tuesday, up by $17 per tonne from $28-48 per tonne on August 15 and the highest since mid-June.
Correspondingly, Fastmarkets’ daily assessment of the copper grade A cathode premium, in-whs Shanghai, was $45-55 per tonne on Tuesday, up by $7-17 per tonne from $28-48 per tonne on August 15 and also the highest since mid-July.
The smaller increase reflected lower trading in the bonded market compared to the seaborne market.
“Bonded copper with immediate delivery is popular, which means you can make money right after you import them, but I don’t see those kind of units on offer. I guess suppliers are more willing to import themselves rather than sell in spot, reducing spot activity there,” a second trader in Shanghai said.
The premium for equivalent grade (EQ) copper cathodes in Shanghai was also underpinned by improved arbitrage conditions, with the premium moving higher amid low spot availability.
“I bought EQs at the high $20s [per tonne]; it’s not easy to find spot units with August arrival,” a third trader in Shanghai said.
Participants pointed to slower-than-expected copper shipments from Africa amid logistics issues as a reason for the limited availability of spot EQ cathode.
Fastmarkets’ weekly assessment of the copper EQ cathode premium, cif Shanghai, was $20-30 per tonne on Tuesday, against at a premium of $0-10 per tonne on August 15, marking the highest since level mid-June.
Fastmarkets’ copper import arbitrage averaged a loss of $24.23 per tonne over August 16-22, against an average loss of $44.34 per tonne over August 9-15.
Elsewhere in Asia, the Southeast Asian copper cathode market remained static, with low spot liquidity amid slow orders.
Fastmarkets’ weekly assessment of the copper grade A cathode premium, cif Southeast Asia, was $60-75 per tonne on Tuesday, unchanged since July 25.
The copper cathode premium fell in the US after months of low liquidity in the spot market.
Fastmarkets’ weekly assessment of the copper grade 1 cathode premium, ddp Midwest US, was 9.00-10.50 cents per lb on Tuesday, widening downward from 9.50-10.50 cents per lb on August 15.
It is the first movement in the premium since June 27.
The premium has softened in a lackluster spot market, with most buyers meeting their cathode needs through long-term contracts, sources said.
“Our copper numbers have been all over, so the range is a bit wider,” a seller said.
A trader reiterated that “people are not doing spot business, just taking cathode contracts,” adding that business is very slow on the copper scrap side too.
“Many furnaces are down, and they have backed off from buying,” the trader said.
Keep up to date with the latest insights and updates from the copper market with our dedicated copper market insights page.