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To: 23456 who wrote (8506)	3/18/1998 9:03:00 PM
From: goldsnow	Read Replies (2) \| Respond to of 116813

News Alert from Reuters via Quote.com Topic: (NYSE:CYM) Cyprus AMAX Minerals Co, (NYSE:AR) Asarco Inc, (TSE:NOR) Noranda Inc., Quote.com News Item #5809603 Headline: FOCUS-Copper premium hikes come amid tightness ====================================================================== By Derek J. Caney NEW YORK, March 18 (Reuters) - Price increases announced by virtually all North American copper producers reflect severe dislocations in the refined copper market and an increasing tightness in the market for continuous cast copper rod, which accounts for 60 percent of world copper consumption. BHP Copper, a unit of Broken Hill Proprietary Ltd (AUS:BHP), Southwire Co and Amrod Corp are the latest rod producers to announce 0.25-cent premium hikes for second quarter deliveries. They come on the heels of a 0.25-cent rod premium increase by Cyprus Amax Minerals Co (NYSE:CYM) announced Monday. Asarco Inc (NYSE:AR) announced a 0.25-cent rod premium high, effecive March 1 in late February. Rod conversion charges now range between 8.25-8.50 cents over the COMEX spot price, which settled at 79.95 cents a lb Wednesday. Noranda Inc (TSE:NOR) raised its second quarter U.S. cathode premium by 0.20 cent to 3.20 cents over COMEX spot. Kennecott Utah Copper, a unit of Rio Tinto Plc (ISEL:RIO) raised its cathode premium by 0.15 cent to 2.80-3.00 cents for most Midwestern locations. Customers said Phelps Dodge has yet to move its premiums. The tightness appears to be the result of several factors, including slow rail shipments out of the Southwest where most of the continent's copper is produced to the Midwest and the Northeast, where much of the copper is consumed. "There are shipments that normally take a week and a half to two weeks that are taking anywhere from six to seven weeks," said one copper consumer. "To avoid southwestern copper, you've got to get units from Amarillo, Tex, (imported) material from New Orleans, or Canadian copper. And those are in very tight supply." Union Pacific has been battling congestion on the rail lines since last summer as a result of the aftermath of its merger with Southern Pacific. Union Pacific made its presentation Wednesday to the National Transportation Safety Board, which has opened hearings on Union Pacific's safety performance. "Generally speaking, shipments throughout the Gulf Coast have been subject to delays," said John Bromley, a Union Pacific spokesman said. "We're encouraged by the steady improvements that we've made in this area and we're expecting a turnaround by early April." Spot merchant premiums in the Northeast have risen to as much as 4.50 cents over COMEX spot for guaranteed truck delivery, up 1.00 cent in the last week. But most Northeast premiums are 4.00 cents over COMEX spot. Merchant premiums in the Midwest have also crept up 0.25 cent in the last week to 2.75 cents over COMEX spot. "Certainly merchant premiums have improved over the last several weeks," said an executive from Noranda Inc. "So naturally we have to pass along increases to our customers as well." Exacerbating the slow rail shipments is continued strength in the market for copper rod, which is used as an intermediate in wire and cable production. Producers say that rod production is up 6 percent over year ago levels, which has also contributed to the increase in rod conversion charges. "The rod market is very tight," said Mark Beck, vice president of metals procurement for Essex International. "Everybody is pretty much sold out. So, no, we weren't surprised by the rod increases." Tightness in the scrap market has also contributed to the tightness in the cathode market. When COMEX prices are low, scrap dealers are often reluctant to sell their devalued inventories, leading scrap consumers, namely brass mills to substitute cathodes. Barebright scrap is currently trading at as much as a 1.00 cent premium to COMEX May, when normally it trades at a slight discount. Burnt scrap is trading at 2.00 to 2.50 cents under COMEX May, after trading at as little as 5.00 cents under May a month ago. Increased exports of No. 2 refinery scrap to China have tightened the domestic market to a point where several consumers of number have had to curtail production because they cannot get the scrap they need. Differentials for No. 2 refinery scrap have narrowed to 10 to 12 cents under COMEX May, which settled Wednesday down 1.65 cents at 80.85 cents a lb after trading from 80.25 to 82.60 cents. derek.caney@reuters.com)) Copyright 1998, Reuters News Service