Reuters reported that China's large copper smelters are offering 2013 exports of refined cathode at cheaper premiums ranging from about 12% to 21% less as they compete with major suppliers such as top world producer Codelco boosting supply in Asia.
Traders and smelter officials said that the premiums of about USD 75 per tonne to USD 83 per tonne over cash London Metal Exchange copper prices applied on deliveries to bonded warehouses in Shanghai or some Asian ports.
Copper cathodes do not have to leave Chinese soil to be considered exports, a status they receive when they enter a bonded warehouse or factory that processes cathode into finished products for export only and duty is paid.
Traders said that the delivery for bonded warehouses in Shanghai is expected to attract bookings from Chinese importers who can re import the cathodes with lower premiums than metal offered from Japan and Chile.
Chile's Codelco offered premiums ranging from USD 98 to below USD 105 per tonne for 2013 term shipments to China while Japanese premiums were around USD 85.
Manager at a large Chinese smelter said that major smelters are offering premiums mostly in the range between USD 70 and USD 80. Our logistics costs are lower, so we can do lower premiums. We have signed some export contracts. We are still talking to other buyers.
Several sources said that the smelters were in talks with Asian end users and international trading houses for 2013 exports and some cathode was already booked for Taiwan at a premium of about USD 75 per tonne on a CIF basis. That was less than the USD 85 premium offered by Codelco and USD 80 by a global producer and an international trading house for 2013 term shipments to Taiwan.