Steady Premium Amid Market Stability
Aurubis, Europe’s largest copper producer, has confirmed that it will keep its copper premium at $228 per ton for 2025, maintaining this level for the third year in a row. This premium is applied to the London Metal Exchange (LME) copper price and is calculated on a free carrier (fca) basis. The price was initially raised by 85% for 2023, largely due to increased production costs, rising energy prices, and higher freight charges in a tight supply environment with stable demand.
Market Conditions Remain Consistent
The decision to sustain the copper premium reflects the overall stability within the European copper market. Current spot market premiums for grade A copper cathodes delivered to Germany have remained steady, fluctuating between $180-200/t, similar to the previous year. Metalnomist assessment as of October 1st indicates that spot premiums have shown little change, highlighting a balance of steady demand and limited supply.
Cautious Outlook for Demand
Despite the maintained premium, demand in Europe has remained subdued, keeping prices in check. Copper consumers are exercising caution as they anticipate a sluggish 2025, particularly due to weakness in the construction sector. Market participants believe that the premium could have been higher, but sluggish economic activity has tempered potential increases.
Global Factors and Future Negotiations
In South America, copper producers have not yet finalized their premium agreements for 2025 with European buyers, and there are speculations that their premiums may be lower than Aurubis’. The copper market is closely linked to global economic trends, with recent economic stimulus measures in China and rising oil prices creating a sense of optimism. Recently, three-month copper prices on the LME surpassed the $10,000/t threshold, influenced by various geopolitical and economic factors.
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