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Codelco slashes copper rates-18th China(Guangzhou)Int¡¯l Non-Ferrous Metal£¨Copper£©Exhibition
11/23/2016 Copper exhibition -non-ferrous metals expo |
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Gulf Today reported that world¡¯s leading copper producer Codelco has cut its 2017 term premiums to China by more than a quarter, an executive at the Chilean company said, reducing them to their lowest level since 2009. Japan¡¯s biggest copper smelter Pan Pacific Copper also expects its term premiums to China next year to be near Codelco¡¯s offer of USD 72 a tonne, down 31% from this year, its president said.
The cut underlines slower demand growth in China and comes despite the recent rally in the industrial metal prices on signs of economic strength in the world¡¯s biggest copper consumer.
Codelco¡¯s senior commercial vice president Rodrigo Toro, speaking on the sidelines of a conference, said the company had set next year¡¯s premium for physical delivery of metal in China at USD 72 a tonne over the London Metal Exchange benchmark. That is down from USD 98 a tonne for this year¡¯s contracts and the lowest since 2009, Reuters data shows.
Traders said it was the first time that Codelco¡¯s premium in China has been lower than for Europe. The company has offered to cut premiums there to USD 80 to USD 85 a tonne.
A trader in Shanghai said that ¡°Codelco has gone in aggressively for next year to conserve market share.¡±
The miner is battling with domestic smelters that have ramped up production of refined metal by 8.4 per cent to 6.2 million tonnes this year.
PPC President Mr Yoshihiro Nishiyama told Reuters that Codelco¡¯s USD 72 a tonne was an appropriate level given recent spot premiums that reflected softer Chinese demand and higher inventories.
Mr Nishiyama said that ¡°Premiums in Asia had been higher than Europe due to strong appetite from China. But that has changed since last year in the face of slower growth in China and increased stock built by speculators who had failed to sell them at a high profit.¡±
The lower premiums reflect a tougher environment for metals sales after miners in Peru churned out a bumper year of supply this year. But analysts have recently made a downward revision to forecasts for 2017 mine supply growth to 0 to 1%.
-18th China(Guangzhou)Int¡¯l
Non-Ferrous
Metal£¨Copper£©Exhibition
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