China Curbs Copper Purchases as Europe Steps Up, Aurubis Says

Apr 07, 2014 10:06 pm ET

April 7 (Bloomberg) -- Aurubis AG, the second-biggest refined copper producer, agreed to cancel some shipments to China as buyers reduce stockpiles after prices slumped.

Copper product makers are taking a “hand-to-mouth” approach and importers are adjusting positions on speculation prices may fall further, Stefan Boel, a member of Aurubis’ board, said today. The slowdown since November is “a little bit of a pause” and also may be being driven by reduced demand for use as finance collateral, currency depreciation and seasonality, according to the Hamburg-based company.

“If I need cathodes here and they have too much down there, shipments are canceled or deferred on mutual agreement and that works for both parties,” Boel said in an interview in Santiago. “We are happy to do it when Europe is short cathodes.”

Suppliers were shipping copper to China as premiums for imported metal climbed to a record in August. The surcharge, added to the copper price on the London Metal Exchange slumped 54 percent this year to the lowest in a year, according to Metal Bulletin data. The fee in Europe is up 6 percent, the data show.

Europe and the U.S. are “going well,” Boel said. China is “very well supplied” with copper concentrate and there is “a massive amount” of concentrate in Indonesia waiting to be shipped. The cathodes market probably will be balanced, he said.

After falling about 10 percent this year, the price of copper “has more to gain than to lose but nothing spectacular,” Boel said.

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