How a physical copper deal really works, step by step

Every copper deal follows roughly the same path, even when the people involved describe it differently. Knowing the stages helps you see where you are, what should happen next, and when something is wrong.

These are the eight stages we use in every Copper Supply deal room.

1. Introduction

Everyone in the chain says who they are and who they represent: buyer, seller, and any intermediaries on either side. This is where you check identities and ask who the principals are. See the mandate checklist.

Where it breaks: nobody will name the principal, and the conversation goes in circles for weeks.

2. NCNDA and IMFPA

The parties sign a non-circumvention agreement and record commission splits. See NCNDA and IMFPA.

Where it breaks: commissions don't fit inside the price, or the principal refuses to sign.

3. LOI or ICPO

The buyer states what they want and how they will pay: product, specification, quantity, delivery point, incoterm, and payment method.

Where it breaks: the buyer's payment terms are something no seller will accept, such as payment only after delivery in China.

4. Offer (SCO or FCO)

The seller makes a formal offer with the documents that support it: licences, certificate of origin, warehouse receipt and recent assays.

Where it breaks: the documents are old, recycled or don't match each other. See the 60-second SCO check.

5. Contract (SPA)

Both sides agree and sign the sales and purchase agreement. Every term that matters is written down: specification, quantity and tolerance, price formula against the LME, incoterm, inspection, payment instrument, documents, and what happens if something fails. Changes after signing go into a signed amendment.

Where it breaks: one side tries to change payment terms after signing.

6. Inspection

An independent inspector checks identity, weight and quality of the lot, usually in a bonded warehouse or at loading. See inspection certificates.

Where it breaks: the seller can't arrange access, or the lot isn't where the receipt says.

7. Payment

The payment instrument is issued and confirmed, or, for a trial, payment is made after inspection under conditions where the buyer controls the goods. See payment terms that close deals.

Where it breaks: the gap between a seller who wants security before releasing goods and a buyer who wants to test before paying. Nobody funds the middle.

8. Delivery

Goods are released, transported and shipped. Bills of lading, invoices and packing lists are issued. Commissions are paid. The deal is complete.

Where it breaks: documents arrive late or don't match the letter of credit, delaying payment.

The pattern worth remembering

Most failed deals fail at stages 1, 3 and 7: people who aren't who they say, buyers with impossible terms, and payment structures that leave one side carrying all the risk. Fix those three and the rest is paperwork.

On Copper Supply, a deal room keeps the parties, documents, signatures, offers and history of each stage in one place, so everyone sees the same version.