A long time ago, when the world was (to our eyes) a much simpler place, copper producers who sold their metal on the basis of the LME price decided that they should include with that price a premium which would reflect the cost of moving the metal from - let’s say - Chile to Europe, where most of their consumer customers were located. So the premium would cover the cost of shipping, of insurance, of time and so on. Pretty straightforward; the intention being, of course, to ensure that the producer effectively received the LME price as its net benefit.
Over the years, though, that simple concept has evolved, under the influence of greater competition, a sharper appreciation of trading possibilities and, not least, easier and quicker dissemination of information. What the premium has come to be is an indicator of anticipated...
