Record-high copper prices have hit demand in South Korea and Taiwan, with import premiums slipping as some buyers seek to postpone or cancel shipments of the red metal, traders said on Friday.
There have been no spot enquiries for copper cathode in South Korea since the second quarter and the last several weeks have seen few in Taiwan, where traders say copper product makers are unable to pass on high metal prices to consumers.
"The current copper price is extremely high, so everybody is squeezing their inventories of copper cathode and waiting for prices to come down," a Taipei-based merchant for a Japanese trading house said.
But buyers could be in for a long wait. Copper prices have risen 30 percent in the last year, hitting an all-time high of $3,790 a tonne on Thursday for delivery in three months, fuelled by a global deficit and strong demand from China.
Some analysts say the metal is due for a correction, pointing to slowing global economic growth and growing capacity at the world's smelters adding to supply in the next few months, but others say high-energy costs will continue to underpin prices.
Spot premiums to Taiwan have been quoted at $60 to $70 a tonne, including cost, insurance and freight, over the London Metal Exchange cash price. This is down from around $100 to $110 in July and $135 at the start of the year, traders said.
Customers, including the island's largest copper buyer the state-run Taiwan Power Co had been unable to swallow the additional costs and had cut back on purchases, pressuring spot premiums, traders said.
Traders added they were hoping the world's largest copper producer, Codelco of Chile, would offer significantly lower premiums for next year. "We are looking for between $70 and $100," a trader said. Codelco set 2005 premiums for Taiwan at $125 a tonne.
Comments
Comments are closed.