European copper producer Aurubis AG will keep the premium it charges to deliver metal to customers in the region at a record high in 2024 as it anticipates a rebound in demand.
The company on October 5 said that it has told customers it will keep the surcharge at $228 a ton, ahead of the start of annual supply negotiations in London during the week of October 12. The move to maintain the rate — which is charged on top of London Metal Exchange copper futures — comes despite a sustained downturn in Europe’s industrial economy.
Copper’s demand outlook has been split between deteriorating consumption, in sectors like construction, and rising usage in electric vehicles and renewables. Chinese demand has been particularly resilient, with the International Copper Study Group forecasting consumption to grow 4.3% there in 2023, while weakness in Europe and the U.S. will drive a 1% contraction for the rest of the world.
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Aurubis is Europe’s largest copper smelter. Its premium sets the benchmark for the rest of the European industry, alongside an offer from Chile’s Codelco, which had also hiked its 2023 premium for the region sharply.
“For 2024 we see a pick-up in refined copper demand, especially in the segments related to the green energy transition,” Martin Sjöberg, Aurubis’ head of commercial, said in an email. “With our continuous and measurable efforts in all aspects of sustainability, we offer responsibly produced copper for the European economy.”
While concerns about the demand outlook persist ahead of the LME’s annual industry gathering next week, buyers in Europe are also bracing for supply constraints following a fire at a major refinery in Sweden owned by Boliden earlier this year.
