Japan's Pan Pacific Copper sees China copper premium near $72 per tonne

Pan Pacific Copper (PPC), Japan's biggest copper smelter, expects its 2017 term premiums to China to be near $72 per tonne, down from $105 per tonne this year, its president told Reuters on Tuesday. Earlier on Tuesday an executive of global No 1 copper miner Codelco said at the 'Copper 16' conference in Kobe that the Chilean company has cut its 2017 term premiums to China by more than a quarter to $72 per tonne, the lowest level for sales into the world's top consumer of the metal since 2009.
"It's an appropriate level, as I had expected the premium to come between $70-75/T," said PPC President Yoshihiro Nishiyama, speaking in an interview on the sidelines of the conference in Kobe. Copper prices have surged since Donald Trump's victory in the November 8 US presidential election stoked hoped for a boost in infrastructure spending in the world's biggest economy. Brighter views on demand in China, the world's top buyer of the metal, also fuelled the price jump.
But Nishiyama, who is chairing the Copper 2016 gathering this week, said the speed of the rally would not be sustainable, though sentiment has improved recently. "I think the market levels have been lifted by a stage," he said, predicting market prices will likely stay above $5,000 a tonne for coming months amid firmer demand in China and declining inventories in Shanghai.
"Financial investors who had bet on weaker prices in the second half of this year went into panic (after the US election) and unwound their positions, which caused a (price) surge," said the president of PPC, an arm of Japanese oil and metals company JX Holdings.
For copper treatment and refining charges (TC/RCs), Nishiyama said smelters and miners began 2017 negotiations early this month. "Smelters have sought above $100/T, 10 cents/lb while miners have offered in the $90/T, 9 cents/lb. There were no big gaps this time," Nishiyama said.
"We aim to settle above $100/T, 10 cents/lb," he said.