China’s copper importers are reining in the amount of tonnage they buy through annual supply negotiations, once a bellwether for the global metal market, and opting for spot supplies instead.
Premiums in the spot market for imported copper collapsed below zero earlier this year, hurting buyers who agreed annual fees at Asia Copper Week last year at $89 a ton. The premium is a surcharge paid on top of London Metal Exchange prices by Chinese traders and fabricators. But the significance of the annual premium — set by Codelco’s deals with major customers — has already waned, and this year appears to be a watershed moment. Codelco, the same as last year, the traders said. That’s higher than current spot levels near $50 and far above traders’ expectations for annual deals, they said.