London 22/06/2016 - South Korea has purchased copper cathodes at a low premium of $52 per tonne in a new tender this week, the country's state-run Public Procurement Service (PPS) said on Wednesday.
PPS, which manages South Korea's stockpiles of resources, bought 1,500 tonnes of Korean copper, which is free of import tax, from Korean-Japanese joint venture LS-Nikko Copper at a premium of $52 per tonne basis cost, insurance and freight (CIF) over London Metal Exchange cash prices.
The number is far below LS-Nikko Copper's annual contracts with domestic consumers, a well-informed Korean source said, adding that the result is surprising.
The premium is also lower than the last copper tender in May, which was awarded at $64 for Philippine-origin metal, although it is more or less in line with spot levels in South Korea at $50-60 per tonne CIF.
The surprisingly low number indicates that exporting to the Chinese market is difficult at present, the source added.
Copper premiums in Shanghai have edged up to $45-55 per tonne CIF this week, up $5 from a multi-year-low over the past three weeks.
(Editing by Mark Shaw)