UPDATE 1-Pan Pacific agrees unchanged 2012 copper premium

UPDATE 1-Pan Pacific agrees unchanged 2012 copper premium

(Reporting by Yuko Inoue; Editing by Michael Watson)


 Pan Pacific Copper , Japan's biggest copper smelter, has kept its copper premiums for 2012 supply contracts for Asian customers unchanged from 2011, reflecting solid appetite for the industrial metal, a company source said.

Consumers in China, Taiwan and South Korea agreed to pay $100 a tonne above the London Metal Exchange cash price for a total of 110,000 tonnes of refined copper for shipments in 2012, the source said.

"Real demand for copper in China remains solid," the source said, adding that the contract volume was bigger than the 100,000 tonnes deal signed by the company at this time last year. "Europe's economy may be weak, but the market situation is different in Asia."

Japan's exports of refined copper to China and Taiwan totalled 353,212 tonnes in 2010, Finance Ministry data show. But exports in the January-August period of this year were down 40 percent from the same period a year ago at 165,600 tonnes as the March earthquake damaged plants and squeezed supply.

Sumitomo Metal Mining Co , Japan's second-biggest smelter, said it planned to finalize deals by the end of November. Mitsubishi Materials Corp , the No.3, declined to comment.

Trading sources in London said on Wednesday Chile's Codelco , the world's top copper producer, is offering lower annual physical copper premiums for European buyers for 2012 at $90 a tonne, down nearly 9 percent on this year's terms.

The annual contracts for copper supply are hammered out between Codelco and its clients, starting for Europe during the LME Week global industry gathering now underway in London. Most Asian buyers tend to negotiate their contracts later this month and into November.

Japan's copper premiums for Chinese customers are usually higher than Codelco's contracts for Japanese and Chinese customers as the proximity to China, which allows flexible handling of contracts, make Japanese smelters more bullish, an industry official said.

12:13am EDT