UPDATE 2-Codelco slashes China 2016 copper premium to 3-year low -sources
* Codelco term offers down 26 percent from 2015
* Unexpected low offer underscores weak Chinese demand -trade (Adds comments)
By Polly Yam
HONG KONG, Nov 16 (Reuters) - Chile's Codelco, the world's top copper producer, has slashed its 2016 premium to China for the refined metal by more than a quarter to a three-year low, traders said on Monday, the latest sign of weakening demand from the market's biggest buyer.
In a move that will deepen concerns about waning consumption as growth in the world's second-largest economy slows, Chile's state-owned miner Codelco offered a premium of $98 per tonne for 2016 term shipments, down from $133 per tonne this year,
Codelco's premiums, which buyers pay on top of prices on the London Metal Exchange (LME) to secure physical copper, are viewed as a benchmark for global contracts, and other producers are likely to follow suit.
Traders and buyers in China, who had expected premiums to be cut to about $105-$110, were shocked at the drop that was the biggest in percentage terms since the global financial crisis.
This underscores a bleak outlook for LME prices which are currently mired at six-year lows, while also stoking worries that production cuts have not been enough to whittle down global inventories and reinvigorate demand.
"We are surprised, and the offer is quite low," said a trader at an international trading firm. Continuación...