* To cancel 10,000 tonnes term metal shipments to
* A roaster not working as expected, output hit -source
* BHP delaying some Q3 refined copper shipments -sources
(Adds comments, BHP details)
By Polly Yam
HONG KONG, July 9 Chile's Codelco has
asked certain buyers of refined copper in China to cancel some
term shipments scheduled for delivery in the second half of the
year as the firm processes less ores from a new mine, three
The shortfall is likely to push Chinese importers to buy
spot refined copper from the international market, underpinning
global prices that have already risen more than 10
percent from this year's low in March.
Codelco, the world's top producer of copper, is likely to
cancel a total of around 10,000 tonnes of refined copper due to
continued problems at its new Ministro Hales mine, said a source
who is familiar with Codelco's operations.
That would be about 3 percent of the firm's 2014 contracted
term shipments to China, Codelco's biggest customer and the
world's top copper consumer.
The miner has already cancelled more than 7,000 tonnes so
far, said the source, who did not want to be named as he was not
authorised to speak to media.
Codelco in Chile did not immediately respond to calls and
emails seeking comments.
"Codelco asked us and wanted to cancel a bit every month, or
any months we can," a China-based copper trader who works for an
international trading firm said.
Another China-based source also confirmed that Codelco had
asked certain clients in China to cancel some term shipments
scheduled for delivery in the second half.
Codelco had cut term shipments to China in the first half of
this year as well, on concerns over production at the Ministro
The source familiar with Codelco's operations said a roaster
built to process high arsenic ores from the new Ministro Hales
mine was not working as expected, hurting the company's refined
The roaster had been expected to be fully operational in the
second quarter of 2014 but it continues to have some technical
problems, he added.
BHP TERM SHIPMENTS
However, Codelco is not the only supplier facing problems
with delivery, sources said.
Some buyers in China have also been asked by global supplier
BHP Billiton to delay term shipments of refined copper
scheduled for delivery in the third quarter, two sources said.
A source at a large factory which uses refined copper to
manufacture semi-finished copper products said the company was
looking to import spot copper because BHP would delay 2,000
tonnes of term metal due to arrive Shanghai in August.
The buying could boost spot premiums, which have already
risen more than 40 percent from mid-June to $130-$150 per tonne
over cash London Metal Exchange for refined copper due
to arrive Shanghai soon, traders said.
A Melbourne-based BHP spokeswoman said the company did not
comment on commercial arrangements.
(Additional reporting by the Santiago bureau; Editing by Himani