US cathode premiums steady, but buying in lieu of scrap continues
Source: Platts
metalsplace.com
Copper cathode premiums in the US remained unchanged this week despite continued reports from traders and consumers that scrap dealers and consumers were buying more cathode amid severe tightness in scrap supply.
The buying of cathode has had very little effect on cathode supply however, as most consumers have not had the orders to use all their monthly contractual consignments.
"It's happening," one broker said, referring the purchase of cathode by scrap consumers. "But from the guys I deal with, it's a drop in the bucket." The broker added that "very attractive" premiums in the range of spot COMEX plus 4-5 cents FOB were available for export delivery.
The broker recently bought at spot COMEX plus 6 cents for Northeast delivery, but felt premiums for Midwest delivery were closer to the high 4s and low 5s for good freight locations. The Platts New York Dealer Cathode Premium remains at spot COMEX plus 5-6 cents.
A large consumer of both cathode and scrap agreed the scrap consumers were buying cathode. But other factors were at play. "The reason you buy scrap is because there's value in it. And when the values start approaching COMEX, there's no appeal. And that's really where it's gotten," he said.
The consumer felt premiums were between spot COMEX plus 4-6.50 cents, delivered Midwest, mainly because he was able to buy both off-grade for a reduced price as opposed to Grade A cathode.
A merchant also agreed that scrap supply had grown "really tight" but inquiries for the Northeast had picked up amid delayed vessel deliveries to that region. Other traders agreed.
The merchant did not feel the reduction in scrap supply had resulted in increased demand for cathode, however. Midwest deliveries were still in the range of spot COMEX plus 6.50 cents he said. |
