The market is traditionally operating as expected, with spot demand slowly evaporating in the days leading into September. Throughout September and October, copper industry participants will be evaluating the market to determine their initial offers for 2019 contracts that will be finalized around Thanksgiving.
But unlike the past few years - which saw weak volatility, lackadaisical demand trends and few surprises - this year carries multiple uncertainties, both in the United States' domestic market and abroad, for the copper industry to traverse before reaching agreements.
Throughout the summer US premiums have been volatile, with the market surging due to high freight costs, rising financing rates and a wide arbitrage between CME Group prices and those on the London Metal Exchange.
"[The arbitrage] is still high and freight is still crazy, so no new cathode [coming] into the US market," one producer source said.
As long as freight...