Peru’s Congress removes energy and mines minister amid sector protests
Romulo Mucho was removed from his post on Tuesday amid protests from small-scale miners in the Andean nation.
The spot copper price enjoyed another strong session on Friday ending the week at $3.32 a pound, up 7c from Tuesday’s lows while three-month LME copper ended the week at $7,188 a tonne,
The red metal was buoyed by news that Chilean copper giant Codelco will substantially hike copper premiums for 2014 as annual negotiations with buyers kick off.
The copper premium is the difference between the benchmark futures price and the cost for delivered copper and according to Reuters Codelco could raise premiums by as much as 50% from this year’s $98 a tonne:
“Japanese smelters shocked the market with a proposed 45 percent increase in charges to Chinese end users. Subsequent estimates that Codelco could seek $130-$150 premiums in China is likely less off the mark, though still high.”
The size of the premium is an indication of underlying demand for the metal and spot premiums in China, responsible for consuming some 40% of the metal, has tripled so far this year and recently reached decade highs of more than $200 a tonne.
Codelco represents 10% of global production or 1.7 million tonnes per annum and the state-owned company acts as a bellwether for the industry.
The copper price is down some 8% year to date, but up strongly from near three-year lows just above $3 a pound reached at the end of June.
