Copper cathodes market participants are closely monitoring the unfolding US import tariffs situation. It has already led to volatility in the metal exchanges in London, Chicago, Shanghai and elsewhere.
United States: Lack of spot activity and tariff concerns
In the United States, there was a marked lack of spot activity in the copper market due to recent extreme volatility in the London Metal Exchange/Chicago Mercantile Exchange arbitrage. As well as a considerable oversupply of material based on earlier responses to concerns over potential tariffs.
While there had been some questions asked about whether copper might be included in the latest round of Section 232 tariffs so far this month, copper has remained exempt from any form of tariff. The Section 232 investigation into copper is ongoing, however. It has an anticipated end date of November 22, 2025. Although there have been rumors in recent weeks that a decision could be made much sooner than that.
Fastmarkets’ copper grade 1 cathode premium, ddp Midwest US was assessed at 10.5-11.5 cents per lb on April 15, down from 12-13.5 cents per lb on April 8.
United States: Wide range of inputs and market volatility
Inputs were received in a notably wide range during the session, with multiple sources commenting on a virtual lack of spot business.
An offer was reported at 0.5 cents per lb. One general indication of the spot market was received at 0.5-11.5 cents per lb while two more were received at 10.5-11.5 cents per lb.
“The spreads are just very wide depending on quantity and timing, consumers are quite skittish about buying and there is a lot of volatility in the price and the arb,” one US trader told Fastmarkets.
“Nothing is surprising me right now– the price is going to go up and down, and I don’t see that changing anytime soon,” the trader said.
The volatility of arbitrage numbers has contributed to a lack of spot business. In a matter of days during the last pricing session ending Tuesday, these went from as high as $1,730 per tonne to as low as $600-700 per tonne. According to sources, consumers are trying to widen the spread as much as possible. Market participants told Fastmarkets they agreed with both the lows and highs quoted in the pricing session.
United States: Skepticism and distorted market dynamics
Other market participants believed the higher numbers quoted in this session were too high. They believed the 11.5 cents per lb area to be more “hopeful” than reflective. They also believed the 0.5 cents per lb area to be more mindful of factoring in the arbitrage benefit.
“No one is interested in buying,” a second US trader said. They added that “quotes at this time are speculative given the absence of activity, I would be delighted to have a buyer at any premium; that’s how bad it is.
“The arb is attracting an enormous amount of copper into the US, [so the previous premium] is not plausible,” the second trader added, but indicated they would be willing to go lower but spot activity is currently at a standstill.
“The arb is distorting the market tremendously. It’s just not business as usual, to put it mildly,” the trader said.
A third US trader told Fastmarkets that 10.5-11.5 cents per lb was closer to “real numbers”. They cited the large amounts of copper recently imported into US and the arbitrage.
“Now, those that brought non-COMEX approved brands need to sell and are offering lower premiums to get rid of this material,” the third trader said.
Europe: Supply tightness and rising premiums
European copper premiums pushed up across the board. Supply tightness has become increasingly acute in Europe in recent weeks. Sources reported that it is increasingly hard to find material in Europe at the moment.
“There is no copper, and there are no inventories, so people are struggling to find units,” one producer source told Fastmarkets.
Some sources said the fact that copper was being “sucked into the US” was the main cause. Beyond this, however, the low prices on the London Metal Exchange last week had led to an increase in liquidity. This had also absorbed some material.
“People were locking in lots, using the drop in the price to get units,” a consumer source said. “It’s now empty and people are searching for units. The EU is tight because of stuff that is heading to the US.”
Europe: Premium assessments and market outlook
But even though it appears to be virtually “impossible” to get copper cathodes in Europe right now, sources added that the demand picture is not much better.
Fastmarkets’ fortnightly assessment of the copper grade A cathode premium delivered Germany was $210-245 per tonne on Tuesday up from $190-225 per tonne on April 1.
The same assessment of the copper grade A cathode premium, cif Leghorn was $170-190 per tonne on Tuesday up from $160-180 per tonne two weeks earlier.
And that of the copper grade A cathode premium, cif Rotterdam was $170-190 per tonne from $160-180 per tonne on April 1.
But a producer source in Europe said that once the US tariff issue is resolved, “there is a [big danger] that the premiums could swing back,” on themselves.
Asia: Limited spot trading in Shanghai
Spot trading was limited in Shanghai and in the wider Southeast Asian copper cathodes markets in the week to April 15. This has left the premiums largely unchanged on a weekly basis, sources told Fastmarkets.
Fastmarkets assessed the daily benchmark copper grade A cathode premium, cif Shanghai at $85-105 per tonne on Tuesday, unchanged week on week.
The corresponding daily assessment of the copper grade A cathode premium, in-whs Shanghai was also flat week on week at $70-90 per tonne on Tuesday.
Limited offers were seen the latest pricing session to Tuesday, which market participants attributed to the less-favorable import conditions following the upturn in trading in the previous week.
Asia: Market cooling and arbitrage losses
“The market has been cooling down a bit after arbitrage import conditions provided little incentive [to trade], so that’s [behind the limited trading this week],” a Shanghai-based trader said.
“Offers were limited after brisk trading during the previous session – when import arbitrage terms were profitable,” a second trader in Shanghai said.
Fastmarkets’ calculation of the copper import arbitrage was a loss of $80.50 per tonne for April 9-15. It widened from a loss of $54.99 per tonne on April 2-8.
In the Shanghai equivalent-grade copper cathode market, offers were also limited. Some market participants were still looking for spot tonnages despite the less favorable import conditions, sources said.
Asia: Southeast Asian market stability
“Not many units were available, with offers [at around] $60-70 [per tonne], a third Shanghai trader said. “Overall, trading [in the week to Tuesday was] reduced compared with the previous week, but the market remained elevated.”
Fastmarkets assessed the twice-weekly copper EQ cathode premium, cif Shanghai at $55-65 per tonne on Tuesday, against from $53-67 per tonne on April 11 and from $45-55 per tonne on April 8.
Elsewhere, the Southeast Asian copper cathodes market held largely stable amid quiet trading, Fastmarkets understands.
Fastmarkets assessed the weekly copper grade A cathode premium, cif Southeast Asia at $90-95 per tonne on Tuesday, against $90-100 per tonne a week earlier.
The weekly assessment by Fastmarkets of the copper EQ cathode premium, cif Southeast Asia was unchanged at $35-45 per tonne on Tuesday.
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