copper premiums have weakened on softening demand as consumers work off inventories and continue to sit out of the spot market.

The premium spread has widened slightly to 5.25 to 6 cents a pound delivered from 5.5 to 6 cents previously.

"Consumers have been working off left-over inventory for the last two months so demand on the spot has slipped," one trader said. "Premiums have come down a bit. There's plenty of material coming into the Gulf port, and even consumers in the Northeast of the country are not knocking down the door."

With demand in the United States and China softening, some producers are building up stocks and this could knock premiums down further, another trader said. "Chile is not selling much to China so far this quarter. I think some of the producers have accumulated more stocks than they'd like to acknowledge. Producers are trying to ship material to fabricators earlier so that the surplus doesn't show up. Trying to sell material on the spot market isn't appealing because offers for tenders have been so low."

Copper premiums, which went as high as 8 cents a pound, have declined steadily since the end of November after strike action ended at troubled producer Asarco Inc., Tucson, Ariz., and Falconbridge Ltd.'s Kidd Creek complex in Timmins, Ontario.

Demand for material from consumers has declined as many copper-product manufacturers report a drop in business activity since the Christmas holiday shutdown.

The reporting of stocks at the newly Comex-registered Port of Panama City warehouse in Florida had little effect on the market, traders said. The warehouse had a total of 33,511 short tons of copper at the end of Wednesday, the latest data available, with 1,376 tons on warrant and 32,135 tons non-warranted.

But traders said the reporting of stocks was still causing confusion in the marketplace.

The New York Mercantile Exchange has come under fire for reporting the total amount of material at Panama City despite the fact that most of it is already sold to consumers. Nymex's nonferrous metals committee will review next week the reporting of stocks.

"We're still receiving a lot of calls on this and some people have taken this information as some hidden stocks that have been finally located," the second trader said. "We hope to get some resolution on this issue after the meeting next week."