Japan Copper Smelters Start Price Talk with Domestic Contract Users

Japanese copper smelters started copper ingot selling price negotiation with domestic contract users including electric wire and rolled copper makers for 2010 shipment. The premium on copper price at London Metal Exchange is expected to increase by 900-1,000 yen per tonne when Corporaci?n Nacional del Cobre de Chile (CODELCO) already increased the premium to Japanese buyers by US$ 10 per tonne or 15% from 2009. Japanese negotiation is now focused on contract volume.

Japanese smelters already settled with offshore buyers to increase the premium to US$ 74 per tonne for South Korea, to US$ 75 for Taiwan and to US$ 85 for China for 2010 shipment. The premium increased by US$ 10 or around 15% from 2009 as CODELCO. Japanese smelters got normal contract volume as 2008 level while the volume was set only for April-December 2009 and they sold at spot basis in January-March 2009.

Japanese smelters are confident to get 900-1,000 yen per tonne higher premium from Japanese users for 2010 shipment. The contract volume is expected to set for 12 months basis.

However, domestic copper demand is very slow when the demand is expected to keep less than 1 million tonnes in 2010 as the demand decreased to less than 1 million tonnes in 2009 for the first time in 34 years. Very slow domestic construction demand could limit the contract volume with domestic buyers while offshore buyers recover the 2008 level of purchase.