Refined copper premiums in Europe surged higher as the lack of metal tightened its grip on the market, physical dealers said on Monday.
London Metal Exchange (LME) stocks fell by 5,925 tonne on Monday, and a further 23,400 tonne are on cancelled warrant. This is metal waiting to be released.
Premiums, the price consumers pay over LME cash metal prices, have been rising over the last few weeks as the lack of copper in all forms -- be it concentrate, blister, cathode or scrap -- has begun to bite.
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Consumers have been scrabbling for material, particularly as Russian copper has been delayed and vessels are stuck in the ice.
Two ships containing at least 20,000 tonne of metal were not due in Rotterdam for another week or two. Copper refiners expecting this metal have been forced to buy copper from the LME instead.
One trader said the ships could take even longer to arrive, and the metal may have to come overland via rail and truck.
In the LME's Rotterdam warehouses, stocks are virtually depleted, and only some 5,875 tonne remain. But 4,225 tonne of this are on cancelled warrant.
You can virtually name your price, said one trader. Chilean copper is impossible to get hold of and Grade A copper easily fetches a $40 premium (in Rotterdam).
Another concurred, saying he had done business in Rotterdam at $50 and in the UK at $40. The warrants are very tightly and safely held.
Premiums in Hamburg have also soared, and are firmly entrenched at or above $30, dealers said.
It is exceptional to see Hamburg premiums this high, one said.
Russian copper premiums, which trade at a discount to LME grade metal, have also been rising, and traders said this material was now being sold at $10 over LME.