LONDON, Sept 30 (Reuters) - Copper premiums in Europe eased further this week and, while the outlook for Europe was weak, most traders looked to demand from top consumer China to put a floor to falling London Metal Exchange futures prices.
Three-months copper prices have fallen by 18 percent in September to hit a 18-month low of $6,170 per tonne on Tuesday as demand for the metal, mainly used in construction and power, has dwindled especially in the United States and Europe.
Premiums for grade A material in Rotterdam eased this week to $30-45 a tonne above the London Metal Exchange cash price , down $10-20 from August. In May, before the European summer slowdown, merchants set the premiums at around $60-80.
'It is very quiet - all the premiums are down across the board, with copper around $30-$40 - it is dismal,' a physical copper trader said.
With the global economy slowing, demand was expected to remain weak and traders agreed the annual benchmark premium for copper in Europe, set by the world's largest copper miner Codelco, would be lower than last year's $115 per tonne.
'Everyone is talking about $90-95,' another physical trader said, adding it could be announced next week or the week after.
He said the markets in China and the Middle East performed much better than Europe.
'Generally China has been very strong - of course this week nothing is happening because they are all on holiday,' he said.
The Shanghai Futures Exchange will be shut this week for National Day holidays.
Traders said the narrowing of the price difference at the start of the month between China and Europe had spurred a pick-up in demand from the world's largest consumer.
Shanghai copper futures prices had lagged rising LME prices since early this year as a result of rising output in China and lower-than-expected growth in apparent copper consumption.
'If the futures price continues down, I think the Chinese will come back in and see a good buying opportunity and the Middle East looks pretty strong as well,' the second copper trader said.
This could put a floor to the falling futures price on the LME, down 31 percent since hitting a record of $8,940 in July.
(Reporting by Anna Stablum, editing by Anthony Barker) Keywords: COPPER/PREMIUMS