Mining News

Codelco sets record benchmark copper premium for Europe, sources say

Reuters Tuesday October 18, 2022 04:46

LONDON, Oct 18 (Reuters) - Chile's Codelco, the world's biggest copper miner, has agreed a record benchmark premium for European buyers at $234 a tonne for 2023, up 83% from this year, two copper industry sources said.

The premiums set by state-owned Codelco for physical delivery of copper are paid on top of the London Metal Exchange (LME) contract and serve as a benchmark for global contracts.

Codelco in London declined to comment.

Last week sources told Reuters that Codelco was offering consumers in Europe a premium of about $235 a tonne for 2023.

Copper industry sources say that many European buyers don't want Russian metal and are having to bid for material from other producers.

Russia in 2021 supplied the European Union with nearly 292,000 tonnes of of the metal used widely in the power and construction industries, according to data from Trade Data Monitor. EU copper imports totalled more than 801,000 tonnes last year, the data showed.

Europe's biggest copper smelter, Aurubis , will charge its European customers a premium of $228 a tonne above the benchmark LME price in 2023, the company said on Thursday. That is sharply up from a premium of $123 a tonne this year.

Montanwerke Brixlegg offered customers a premium of 295 euros a tonne for its low-carbon copper next year and a floating surcharge for high energy costs, a letter from the Austrian company to its customers showed last month.

(Reporting by Pratima Desai Editing by David Goodman)