The premium copper buyers are being asked to pay in Europe climbed this month as lower prices helped spur buying, according to four traders with direct knowledge of the market.
The fee is $90 a metric ton, according to the midpoint of the estimates from the traders, who asked not to be identified because they aren’t authorized to speak to the media. The midpoint fee was $60 in the first week of March. The range for the fee was $80 to $100, against $50 to $90 three weeks ago.
The premium is added to the price of copper cathode, a form of refined metal, for immediate delivery on the London Metal Exchange at Rotterdam and includes insurance and shipping costs. Copper is down 4.2 percent this year on the LME. Supply of scrap metal is already limited, the traders said. Demand usually builds in the second quarter, according to Societe Generale SA.
“There are more indications that things are firming up,” Robin Bhar, an analyst at Societe Generale in London, said by phone today. “It’s a bit early. We’re not getting into the strong season until April.”
Some of the current buying interest stems from potential supply curbs due to port strikes in Chile, the traders said. A stoppage at Angamos, the main export hub for Santiago-based Codelco’s northern mines, entered a 13th day, Chile’s port union said today. Workers went on strike this week at Antofagasta and Iquique, other ports in the region.
The stoppages would have to last a “long, long time” to start tightening the market for the metal used in pipes and wiring, Bhar said. Chile, the world’s biggest copper producer, exported 30,400 tons of refined metal to Europe in January, according to government commission Cochilco.
Buyers are being asked to pay $80 to $85 a ton for copper warrants, certificates giving the bearer ownership of metal stored in LME-approved warehouses in Rotterdam, Europe’s biggest port, according to four traders. The fee, which excludes insurance and shipping, was $65 to $70 in February.
Copper for delivery in three months fell 0.1 percent to $7,598 a ton by 3:21 p.m. in London. Scrap has become less available since mid-February as lower LME prices encouraged recyclers to withhold supplies, Piotr Ortonowski, a consultant at researcher CRU in London, said March 18.