LME −20% cathode: why the price is the first red flag

Open any copper trading group and you will see "Grade A cathode, LME −20%, ready stock". Buyers ask for LME −25%. Some brokers promise it.

In our own trading in 2025 and 2026, buyers regularly asked for LME −15% to −25%, while real sellers of Grade A cathode in bonded warehouses sat at roughly LME −8% to −10%. The gap between those two numbers is where most fake offers live.

Why a discount exists at all

The LME price is for registered brands delivered into an LME warehouse. African cathode bought at a mine, a smelter or a regional warehouse is worth less than that, because the buyer still has to carry:

• transport to port and sea freight
• insurance and financing while the cargo moves
• the risk of brands that are not LME registered
• assay and weight risk
• the time it takes to turn the cargo into cash

The further the copper is from a major port, and the more risk the buyer carries, the deeper the discount.

What moves the number

• Incoterm and location. Copper sold at the gate of a Congolese smelter, collected in the buyer's own trucks (EXW), carries a deeper discount than copper in a bonded warehouse in Dar es Salaam (FCA). In 2026 we saw serious buyers target around LME −16% for EXW smelter cathode in the DRC, against single digits for bonded stock at the port.
• Payment terms. A seller paid immediately after inspection can accept a deeper discount than one waiting months for a letter of credit.
• Volume and contract length. A repeat monthly contract earns a better price than a one-off spot lot.
• Brand and documents. Known producer, clean papers and independent inspection all support a higher price.

These are observations from real offers at the time, not a price index. Markets move, so always compare against current offers from verified sellers.

Why −20% and deeper usually means a scam

If a seller truly had Grade A cathode in a bonded warehouse at LME −22%, any trading house would buy it within the hour at LME −10% and keep the difference. Real copper at that price does not need to be advertised in WhatsApp groups.

The people pushing these prices tend to fall into three groups:

• Contact collectors. They post an impossible price to collect buyer details, then say "the price moved to −12%, still interested?"
• Fee scammers. The price hooks you, and then come the upfront fees.
• Paper collectors. They use the price to get your LOI or ICPO, then shop your requirement to real sellers at a normal price.

How to use price as a filter

• Treat any Grade A cathode offer deeper than about LME −20% as fake until proven otherwise. Our document check flags it automatically.
• Ask the seller to explain the discount: incoterm, location, payment terms, volume. A real seller can.
• Price every offer the same way, as LME plus or minus a percentage, so you compare like for like. Every listing on Copper Supply is shown this way.