Japan Mid-Year Copper TC/RCs Settle Below 2010 Level -Executive
July 27 2010 - 3:56AM
Dow Jones News
Mid-year negotiations between global mining companies and
Japanese copper producers over copper treatment and refining
charges have settled below the level agreed for 2010 contracts, an
executive from a Japanese smelting company involved in the
negotiations said Tuesday.
The executive said he couldn't reveal the exact figure but
confirmed his company had settled TC/RCs with BHP Billiton (BHP.AU)
at below $47 a metric ton and 4.7 cents a pound agreed in January
2010.
The mid-year negotiations typically cover around 10% of annual
copper concentrate offtake and usually provide an indication of
where the next year's annual fees might settle.
He said the TC/RCs were unsustainably low and below the cash
costs the smelters needed to break even.
"At these levels even Chinese smelters will have to cut output.
For Japanese and European smelters they are impossible over the
long term."
TC/RCs are paid by miners to smelters in order to turn copper
concentrate into copper cathode. They are the key source of revenue
for smelters, and tend to fall when concentrate availability is
scarce and smelters are forced to offer competitive fees to attract
limited business.
Reuters reported Tuesday that both Sumitomo Metal Mining Co.
(5713.TO) and Mitsubishi Materials Corp (5711.TO) had agreed
mid-year fees with BHP Billiton but didn't specify the TC/RCs
level.
-By James Campbell, Dow Jones Newswires, +656415-4082;
james.campbell@dowjones.com