Copper’s outlook may be rosier

London
German copper producer Aurubis has just rung the bell on the start of the "mating season", the annual negotiation of term contracts for shipments in the following year.
It has announced it will be reducing its copper cathode premium from $110 per tonne over LME cash metal this year to $92 next year.
Aurubis' preemptive move will raise expectations of a similar-sized reduction in the annual premium from Chile's Codelco, the world's largest producer. Its European premium has been higher than that of Aurubis in both 2014 and 2015 at $112 per tonne.
The case for cutting copper premiums seems obvious. Everyone's worried about the state of demand, particularly in China, which accounts for around 45 percent of global copper usage. The price itself looks wobbly. Currently trading around $5,250 per tonne, basis LME three-month metal, it is already down by around 16 percent so far this year with plenty of bears calling for lower prices still.