UPDATE 2-Japan, China copper smelters win rises of over 10 pct in 2013 TC/RCs
* Japan TC/RCs seen above $69.85 per tonne and 6.99 cents per pound
* Benchmark terms to influence China smelters' term agreements
* China's Jiangxi Copper, Freeport set 2013 TC/RC at $70/7 cents (Recasts with China's Jiangxi Copper deal and spot charges)
By Yuko Inoue and Polly Yam
TOKYO/HONG KONG, Jan 17 (Reuters) - Japan's biggest copper smelter, Pan Pacific Copper, and China's top smelter, Jiangxi Copper , have won rises of more than 10 percent in copper concentrate treatment and refining charges for 2013 from major miners, company sources said, reflecting a recovery in copper mine supply after years of deficit.
The figures could form the benchmark terms for this year and will influence deals throughout the region, including other smelters in China, the world's top consumer of copper.
The deals, which are usually hammered out by year end, were delayed by uncertainty over the global economic outlook.
"The market's looking like it will be better supplied than the past 2 to 3 years. You've got increasing supply coming out of operations like Escondida, giving smelters a stronger hand," said strategist Nick Trevethan of ANZ in Singapore.
"Demand is going to be reasonable, but increasing mine supply is likely to outstrip the demand improvement while more smelter capacity from China is not likely to come on line until the second half," he added.
The fees for Japan have climbed from $63.5 a tonne and 6.35 cents per pound last year, a source said on Wednesday, putting the 2013 figure above $69.85 and 6.985 cents, within the $65-$75 and 6.5-7.5 cents range expected by traders.
China's Jiangxi Copper and global miner Freeport McMoRan Copper and Gold settled 2013 term copper concentrate treatment and refining charges at $70 per tonne and 7 cents per pound, up 10.2 percent from $63.5 and 6.35 cents in 2012, a source at the Chinese smelter said on Thursday.
"We settled $70 and 7 U.S. cents with Freeport. We signed it yesterday," said the source, who had direct knowledge of the talks, but declined to be identified because of the sensitivity of the subject.
A manager at another large copper smelter in China said the firm would sign the same TC/RC with Freeport early next week.
"I estimate that should be the result (of the 2013 TC/RC). We should sign it next Monday or Tuesday," the manager said.
The 2013 TC/RC agreed by Jiangxi Copper and Pan Pacific Copper are lower than charges for clean, standard spot concentrates that changed hands at about $75 and 7.5 cents last month, traders said.
But Jiangxi Copper failed to reach agreement with global miner BHP Billiton after the miner offered $68 and 6.8 cents for 2013 term concentrate shipments, the Jiangxi source said.
He added that the firm would take a "holiday" from BHP, the majority owner of Chile's Escondida, the world's largest copper mine. This means Jiangxi will not take Escondida copper concentrates in 2013 under a multi-year contract with BHP.
The Jiangxi source did not say what amount the "holiday" covered, adding that Jiangxi would buy spot concentrates to cover the reduced term shipments from BHP.
BHP Billiton had held out for better terms for its ore, which has lower impurities than that of other producers.
Global miners pay TC/RC to smelters to convert concentrate into refined metal, with the charges deducted from the sale price, based on LME copper prices. Higher charges are typically seen when concentrate supply rises or when smelter capacity thins.
The International Wrought Copper Council expects global mine supply to expand 6.5 percent to more than 17.7 million tonnes in 2013, versus growth of 3 percent this year. (Reporting by Polly Yam and Yuko Inoue; Additional reporting by Melanie Burton in Singapore; Editing by Clarence Fernandez)
- Tweet this
- Share this
- Digg this