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Chilean copper miner Codelco is offering European buyers a record-high import premium of nearly $235/mt for 2023 shipments, according to Reuters. This is the premium over the London Metal Exchange (LME) cash price that European importers agree to pay for physical copper shipments and is seen as a global benchmark for such contracts. European smelters are offering similar premiums, as the continent’s largest smelter, Aurubis, has set its 2023 premium at $228/mt over LME, up from $123/mt this year, according to company statements from last Thursday. One anonymous source interviewed by Reuters stated that European buyers are shunning Russian copper and need to look elsewhere for inventories. |
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Copper prices have largely stalled since mid-July. Could prices rally if end-users rush to buy non-Russian supplies? Copper end-users that are concerned about increasing prices could consider buying swaps or call options, as either would establish a maximum copper price. Such positions are standard for consumer hedging; however, they can result in opportunity costs or cash costs if metal prices decrease. Please contact AEGIS for specific strategies that fit your operations. (10/17/2022) |
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Note: Clients with AEGIS Platform access can see this and other research, plus hedge portfolio reporting and tools here. |
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AEGIS Insights |
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10/05/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 10/05/2022: European Aluminum Smelters Might Have Negative Margins Through 2023 8/31/2022: Will Chilean Production Issues Drive Copper Prices Higher? 8/24/2022: Chinese Aluminum Supply Issues Could Rally Prices |
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| Important Headlines | ||
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10/16/2022: Codelco offers 2023 European copper premiums at record high -sources 10/13/2022: Aurubis raises 2023 copper premium 85% to $228 a tonne 10/13/2022: Explainer: Will market mayhem erupt if US bans Russian aluminium? 10/12/2022: U.S. may block Russian aluminum imports -source 10/12/2022: USW ratifies agreement with steelmaker Cliffs 10/11/2022: Column: Supply hits catch up with lead as LME stocks shrink 10/10/2022: How a ban on Russia’s mining giants could shake the metals world 10/8/2022: Alcoa Inks 131 MW Wind Power Agreement For 2024 Restart Of San Ciprián Aluminium Smelter 10/7/2022: ISRI opposes Mexico Fe, Al scrap export ban |
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Important Disclosure: Indicative prices are provided for information purposes only, and do not represent a commitment from AEGIS Hedging Solutions LLC ("Aegis") to assist any client to transact at those prices, or at any price, in the future. Aegis makes no guarantee to the accuracy or completeness of such information. Aegis and/or its trading principals do not offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program. Certain information in this presentation may constitute forward-looking statements, which can be identified by the use of forward-looking terminology such as “edge,” “advantage,” “opportunity,” “believe” or other variations thereon or comparable terminology. Such statements are not guarantees of future performance or activities.
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