Industrial buyers procuring copper, aluminium, nickel-bearing or zinc scrap settle nearly every contract as a discount to the London Metal Exchange (LME) reference. This guide breaks down exactly how that discount is constructed, how the LME quotation date is locked, and how to evaluate competing offers on a like-for-like basis.
Rotterdam Loading
SGS Inspection
MOQ 1× 20GP
CIF / FOB Global
The LME publishes cash, 3-month, M+1, M+2, and longer-dated forward prices. For physical scrap shipped Rotterdam-to-Asia (4–8 week transit), the 3-month forward is the dominant reference because it approximates the cash value the buyer faces when the material lands and is melted. Specialty contracts may use cash (for prompt delivery), M+1 (monthly average — favoured by Indian refiners), or 5-day averages around B/L date.
The 'quotation period' is the time window during which the LME reference is averaged or fixed. Common conventions: 'spot at contract signature' (simplest, both sides bear no further price risk); 'monthly average of M+1' (smooths intra-month volatility — preferred by mills with monthly receivables); '5 working days around B/L date' (aligns price with shipment timing); 'buyer's call' (buyer picks the day within a window — buyer carries timing risk). Each convention reallocates price risk; pick the one that matches your treasury policy.
The discount has three components. (a) Freight: Rotterdam → Nhava Sheva $80–120/MT, Rotterdam → Busan $140–180/MT, Rotterdam → Mersin $50–80/MT depending on market. (b) Yard cost: handling, baling, lining, weighing, photo documentation typically $30–60/MT. (c) Inspection + financing + margin: typically $80–250/MT depending on grade complexity. Total discount on copper Millberry CIF Asia usually lands $250–$450/MT.
Each scrap grade has its own discount band. For copper: Millberry $250–$450, Berry $350–$550, Birch/Cliff $500–$800, insulated wire $800–$1,500 (because price = LME × recovery % minus processing cost). For aluminium: UBC $250–$450, 6063 $300–$500, Taint/Tabor $400–$650, Troma wheels $300–$500. The grade discount captures recovery yield, processing complexity and demand.
Example Nautica quote: Millberry CIF Nhava Sheva @ LME 3M Cu on 15-Mar-2026 $8,400/MT − $350 discount = USD 8,050/MT CIF 22 MT 1×20GP. The line shows: grade, destination, LME date, LME price, discount, final CIF, tonnage, container. No hidden surcharges, no extra fees at discharge. The only adjustments that can change the final number are agreed discharge-port inspection results within the contract tolerance band.
Once the LME reference is locked at contract signature, the buyer's LME exposure is zero — they have a fixed USD/MT obligation regardless of subsequent LME moves. If the quotation period is M+1 or buyer-call, the buyer carries LME exposure until the quotation period closes; this can be hedged via futures or options on the LME through a clearing broker. Many of our Indian and Turkish buyers hedge as a matter of treasury policy.
Fixed-price quotes look simple but expose either buyer or seller to large LME swings between offer and execution. LME-linked quotes shift the metal-price risk into the LME contract (which both sides can hedge cheaply) and keep negotiation focused on the discount — which is the only number where Nautica adds value. Buyers comparing offers should always ask competing suppliers to restate their fixed-price quote as 'LME 3M minus $X' for like-for-like comparison.
(1) Quotation period ambiguity — name the LME date, settlement vs cash, time zone. (2) Discount that hides surcharges — insist on 'all-in CIF discount, no further adjustments.' (3) Recovery test tolerance on insulated wire — agree the discharge-port test method (burn vs strip vs density) and the ±% tolerance band. (4) Currency — LME is USD; if the buyer's LC is in EUR, agree the FX fixing date upfront.
Every Nautica offer email contains a 'price worksheet' showing LME date and reference, freight component, yard cost, inspection, margin, total discount, and final CIF. We are happy to re-state on any quotation period the buyer prefers and to re-quote at the buyer's chosen LME date if their procurement schedule moves.
Send us your destination port, tonnage and preferred grade. We will return a sample quote within 24 hours showing the full LME-linked math — buyer keeps the worksheet, validates against their own LME data, and confirms or asks for re-quote. No commitment, no obligation, no chasing.
Primary loading from Rotterdam, Antwerp. Weekly container sailings to Asia, the Middle East, Africa and the Americas.
Every Nautica offer is benchmarked through our LME pricing center and explained in plain language in how LME scrap pricing works. Copper buyers should pair this with the copper scrap price index, and aluminium buyers with the aluminium scrap price index.
Live LME-linked discounts apply to flagship grades from our European copper scrap supplier and our UBC scrap supplier in the Netherlands, with grade tolerances defined in copper scrap grades explained and aluminium scrap grades explained.
Send your quantity, destination port and Incoterm. We reply with a CIF/FOB offer, full specification sheet and export documentation list.
Contact our sales team for competitive pricing, bulk orders, and customized solutions.MOQ: 25 MT | Monthly Capacity: 20,000 MT