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UPDATE 2-Aurubis to offer copper term premiums at $86/T for 2013

* 2013 premiums unchanged from June, $4 lower than 2012

* Traders say offer puts pressure on Codelco to trim premiums

* Annual negotiations to take place during LME week (Adds detail, trader quote) By Harpreet Bhal

LONDON, Oct 5 (Reuters) - Aurubis , Europe's biggest copper smelter, will offer 2013 copper cathode term premiums for its European customers at $86 a tonne, unchanged from levels set in June this year, a spokeswoman for the company said on Friday.

The figures represent a $4 decrease from premiums of $90 a tonne set by the world's No.1 copper producer Codelco for European customers in 2012, seen as an industry benchmark.

Traders said Aurubis' decision to offer premiums at a lower level than the previous year puts pressure on Codelco to trim their 2013 premium against a backdrop of weak demand for the metal.

Sources said this week Codelco's 2013 physical premiums for Europe were likely to be held or trimmed by a small amount.

"We wrote to our customers ... last week and confirmed that $86 (a tonne) will also be valid for next year," said Michaela Hessling, Aurubis head of group communications.

Premiums are paid over the London Metal Exchange (LME) cash price to secure physical metal. It covers the cost of freight and insurance, and reflects regional demand and supply.

Term contract negotiations typically take place during LME Week, a yearly event in London where the global base metals industry meets. LME Week begins on October 15 this year.

"During the negotiations usually everybody is on the same line and now you have one party offering at $86," a Europe-based trader said.

"If the biggest cathodes producer in Europe is attacking the mating season with $86 premiums, be sure that consumers will not be willing to accept $90. The next question is, would Codelco keep their premiums at $90?"

In Japan, the country's biggest copper smelter, Pan Pacific Copper , is in talks with buyers in China to slash its term premium for 2013 shipments by 15 percent from this year, a source familiar with the matter said, as demand slows in China, the metal's top consumer.

A weakening global economy and sluggish demand from China have weighed on copper prices this year.

China's imports of copper in August were its second lowest this year, falling 2.9 percent from July to 355,856 tonnes, as a slowdown in the global economy hit the country's manufacturing sector.

China accounts for as much as 40 percent of global refined copper consumption. Demand has been sluggish this year as the country grapples with the effects of a slowdown in its major export markets.

Benchmark copper prices on the LME fell almost 9 percent in the second quarter, dropping to $7,219.50 a tonne in late June - it's lowest level since late December.

Prices have recovered in recent weeks, with a rally fuelled by a third round of quantitative easing (QE3) by the U.S. Federal Reserve.

(Editing by Pravin Char)

((harpreet.bhal@thomsonreuters.com)(+44 0 207 542 4533)(Reuters Messaging: harpreet.bhal.thomsonreuters.com@reuters.net))

Keywords: COPPER/AURUBIS