By Mark Burton
London 01/11/2016 - The difference in the contractual copper cathode premiums offered in Europe for next year reflects Aurubis’ focus on regional market conditions as well as its provision of value-added services to downstream customers, executive chairman Juergen Schachler told Metal Bulletin.
Aurubis last month offered its contractual customers in Europe a premium of $86 for deliveries in 2017, down from $92 this year. But Codelco subsequently offered European buyers a premium of $82, undercutting the Hamburg-based producer.
Codelco, which sells smaller volumes into the European market and which focuses primarily on Asia, has taken global supply and demand into account in setting the premium, while Aurubis is more focused on regional market conditions, Schachler said in an interview in London on Tuesday November 1.
“The European market situation looks quite good and, for Codelco, the premium reflects the broader market [globally], and there are other factors at play in their decision to set the premium,” he said.
The company expects European copper demand to grow at about 1.5% next year, driven primarily by a continuing recovery in the Spanish market, he said.
“Where we see weakness is in France with consumption, while there is stability in Italy and Germany and growth in Spain and Eastern Europe,” he said.
Aurubis has enjoyed strong growth in the European copper rod market as other suppliers have scaled back in recent years but growth is likely to be more moderate in the coming year, he suggested.
“Our assets are well utilised, but I think there is room for further growth, and certainly if our customers are knocking on our door we will find solutions. At least we want to grow with the market,” he said.
(This article was first published by Metal Bulletin)