Japan Smelters to Hike Copper Ingot by US$ 10% for Asian Buyers

Japanese copper smelters are concluding copper ingot price negotiation with Asian contract buyers for 2010 shipment. The premium on price at London Metal Exchange is expected to increase by US$ 10 per tonne or around 15% from 2009 as price for Asian buyers by Corporaci?n Nacional del Cobre de Chile. The buyers apparently increase the purchase volume from Japanese smelters under economy recovery. After the negotiation, Japanese smelters start price talk with domestic buyers including electric wire and rolled copper makers.

The price leader of CODELCO already increased the premium by US$ 10 per tonne for 2010 shipment from 2009. Japanese smelters try to follow the move increasing the premium to US$ 74 for South Korea and to US$ 75 for Taiwan. However, Chinese buyers reject US$ 85 of CODELCO’s offer compared with US$ 75 in 2009. Japanese smelters’ talk with Chinese buyers is also uncertain.

Asian copper buyers reduced the contract based purchase volume in 2009 under worldwide slow economy while the buyers increased the spot based purchase. However, the spot supply gets tighter due to large volume of import by Chinese buyers. Asian buyers are going to increase the contract purchase in 2010 to stabilize the operation under recovering economy.

CODELCO increased the Japan premium by US$ 10 to CIF US$ 75 per tonne delivered to Yokohama for 2010 from 2009. Japanese smelters would follow the move by increasing the premium by around 900 yen per tonne. Japanese copper buyers are expected to increase the contract based purchase volume to stabilize the operation.