What is metal adder?
Metal adder is a fee charged in addition to the actual COMEX and/or LME market prices. The concept of metal adder is a usual and customary business practice for all copper mills. The metal adder pays for costs which all mills incur when they purchase their raw materials. The largest components of these costs are as follows: 1. “Copper cathode premium” is paid to smelters for their refining of the copper ore (daily amount published in the American Metal Market). 2. Transportation/Freight costs to ship the copper cathode plates from refiners to our suppliers’ melting locations. 3. The cost of using our money for eight weeks (like interest paid to a bank for loaning money). We pay our raw material suppliers when we receive their shipments, and then we own the metal for about eight weeks until we receive our customer’s payments to us (two to four weeks of processing time for drawing to finished size, and then four weeks until we receive payments from customers). During this time, our cash
