London (Platts)--25Jan2013/717 am EST/1217 GMT

European physical copper participants lacked any enthusiasm this week, a theme of 2013 so far, with some pointing to a moderate uptick in US activity as a possible bright spot, albeit slight.

Some US copper cathode market sources said this week that they are seeing a small pickup in business, but added that they are not sure whether the brisker orders are fleeting.

"We are seeing some pickup in business," a cathode consumer said, but "it seems to be opportunistic. It's mostly ongoing customers who have a little bit of an uptick, or they want to restock. So I don't know if it's a real [business] increase overall, but hey, I'll take it."

He added, however, that the slight boost in business doesn't mean he will have to turn to the spot market for extra material any time soon. "It'll be another month or two before we even look at anything," he said.

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Looking at Europe, a broker said: "It's very slow. We are either side of $60 in Rotterdam [basis CIF]. Don't even talk about Antwerp, that's at least a six-month wait as it's locked up in financing deals."

LME stocks in Antwerp stood at 55,700 mt Friday, unchanged from Thursday, while Rotterdam stocks, the port at which Platts assesses, dipped 150 mt to 16,550 mt.

DESTOCKING

Regarding reports in the week that excess Chinese stock could see any destocking head to LME-registered warehouses the broker said he thought that would be unusual as most of the material in Shanghai, ex-exchange, is locked up in financing deals. "I don't see that changing anytime soon."

Still, earlier in the week Australian investment bank Macquarie argued that Chinese destocking of copper could see an increase in London Metal Exchange holdings, which in turn could weigh on prices in 2013, as ex-China demand remains weak.

"We expect that a Chinese destock could see 'visible' copper stocks, particularly the LME exchange, increase by a larger volume than our forecast surplus of 170,000 mt as ex-China demand growth is too weak to absorb additional copper cathode availability," wrote analyst Duncan Hobbs.

Shanghai Futures Exchange inventories dropped to 205,120 mt Friday, down 1.7% week on week, latest weekly data showed. However, bonded, or ex-exchange, material is said to be anywhere between 650,000 and 1 million mt or more.

A producer source confirmed it has been a slow start to 2013. "I am not very optimistic for the first half but I think the second half will be better."

The source said that they had seen no spot business so far but would not sell below $80/mt. The source said the price could move dependent on tonnage, time, delivery etc., but added: "I've said before, you can buy at $40 and sell at $80, it all depends on your connections in the business."

The producer said that the Chinese filing copper cathode to LME warehouse locations was nothing new and would likely continue, "there will be destocking, there is plenty of material out there. I even heard that the Chinese have run out of bonded warehouse space and copper is being held in carparks, I don't know how true that is."

Platts kept its weekly European physical copper assessment at $60-70/mt plus LME cash for Grade A CIF Rotterdam material.

Italian material was unchanged at $50-60/mt CIF Livorno, as was Russian Standard CIF Rotterdam at $0-30/mt.

--Ben Kilbey, ben_kilbey@platts.com
--Edited by Jonathan Fox, jonathan_fox@platts.com

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