LONDON (Reuters) - The world’s biggest copper miner, Codelco, has agreed its 2020 physical copper premium to European buyers at $98 a tonne, the same level as for 2019, copper industry sources said on Friday.
The premiums set by Chile’s Codelco for physical delivery of copper to be paid over the London Metal Exchange benchmark are seen as a benchmark for global contracts, which means other producers are likely to follow suit.
Codelco declined to comment.
The sources said that even though there was pressure for weaker premiums this year, Codelco was able to roll over deals at $98 a tonne because the high quality cathodes that the company produces are preferred by customers.
LME three-month copper has shed about 6% so far this year and hit a two-year low of $5,518 a tonne in early September, weighed down by fears of weak global economic growth.
Codelco is also seeking to keep steady its premiums with Chinese customers at $88 a tonne, the sources added.
Last year, state miner Codelco agreed to sell France’s Nexans, China’s Minmetals and U.S.-based Southwire 50,000 to 100,000 tonnes of copper each from 2019 to 2021 in rolling deals known as “evergreens”, sources close to the matter said.
Even though these are three-year deals, the premiums are still agreed annually, they had said.
Reporting by Zandi Shabalala and Pratima Desai, writing by Eric Onstad; editing by Susan Fenton and Deepa Babington