Aurubis Maintains Record-High European Copper Premium for Upcoming Year

Aurubis AG, the prominent European copper producer, has announced its intention to uphold the historically high premium it charges for metal delivery to customers in the European region for the next year, anticipating a resurgence in demand.

In an announcement made on Thursday, the company revealed that it has communicated to its customers its decision to retain the surcharge at $228 per ton. This decision comes just ahead of the commencement of the annual supply negotiations scheduled to take place in London next week. Notably, this premium is applied in addition to the prices of London Metal Exchange copper futures, and it persists despite a sustained economic downturn in Europe’s industrial sector.

The outlook for copper demand appears to be a tale of two sides, with consumption declining in sectors like construction while simultaneously witnessing an upswing in usage within electric vehicles and renewable energy applications. Notably, Chinese demand has remained resilient, with the International Copper Study Group projecting a 4.3% growth in consumption in China for this year. In contrast, Europe and the United States are expected to experience a 1% contraction in the rest of the world.

Aurubis, as Europe’s largest copper smelter, essentially sets the industry standard for premiums in the European market. This move is in line with an announcement from Chile’s Codelco, which also significantly raised its 2023 premium for the European region.

Martin Sjöberg, Aurubis’ Head of Commercial, expressed optimism about the year ahead, stating, “For 2024, we anticipate an upswing in refined copper demand, especially in segments related to the green energy transition. With our ongoing and measurable efforts in sustainability across all aspects of production, we are committed to offering responsibly produced copper to support the European economy.”

While concerns regarding the demand outlook linger in anticipation of the London Metal Exchange’s annual industry gathering next week, European buyers are also preparing for potential supply constraints following a fire earlier this year at a major refinery in Sweden owned by Boliden.