* Offers at $100-$105/10-10.5 cents spot TC/RC
* Chinese smelters want TC/RC above $110/11 cents
By Polly Yam
HONG KONG, Jan 17 Sellers of spot copper
concentrates have lowered their process fees by about 20 percent
from December on expectations of lower supplies after Indonesia
imposed an export tax and a Philippine smelter reopened, traders
and smelter officials in China said.
Spot treatment and refining charges (TC/RC) this week were
offered at $100-$105 per tonne and 10-10.5 cents per pound for
standard copper concentrates for delivery to China, they said.
The charges hit $130 and 13 cents in December 2013, the
highest since mid-2011, driven by the reselling of concentrates
originally destined for the Pasar smelter in the Philippines and
an expected supply rise in the global market in 2014.
Last month's strong spot charges helped Chinese smelters win
a 41 percent rise in term TC/RC for shipments in the first half
of 2014 from Anglo-Australian miner BHP Billiton
at $99 and 9.9 cents, which are 7.6 percent higher than the
yearly benchmark of $92 and 9.2 cents for 2014.
Chinese smelters and BHP have failed to agree on the annual
term TC/RC for 2014, two officials at smelters said on Friday.
Japan's biggest smelter Pan Pacific Copper and BHP also have
not agreed on annual term TC/RC for 2014. Japan is the second
largest copper concentrate importer after China.
Global miners or trading houses pay TC/RC to smelters to
convert concentrate into refined metal, with the charges
deducted from the sale price, based on London Metal Exchange
copper prices . Higher charges are typically seen
when concentrate supply rises.
Large Chinese smelters were not likely to accept spot TC/RC
below $110 and 11 cents for shipments in the first quarter of
2014 because of high concentrate inventories and expectations of
a supply rise in the global concentrate market this year, a
trading manager at a Chinese smelter said.
The fall in spot TC/RCs are likely due to worries over the
export tax issued in Indonesia, he said.
Indonesia's top copper producer, Freeport-McMoRan Copper &
Gold, faces paying billions of dollars more in taxes if
it fails to convince the government to back down from a new
export tax. The tax came as a surprise after a reprieve from the
country's controversial mineral ore export ban.
The tax for copper concentrate exports has been raised to 25
percent from 20 percent, and will gradually go up to a maximum
60 percent by the end of 2016.
Freeport and fellow miner Newmont Mining together
account for virtually all copper mining in Indonesia.
Traders said the reopening of the Pasar smelter in the
Philippines also had taken up some of the extra supplies, while
global miners and international trading houses were not keen to
offer spot concentrates after signing deals on their 2014 term
shipments over the past few weeks.
"There's not much spot in the market since Pasar already
reopened. While the Chinese smelters are not likely to buy large
amounts of spot before the Lunar New Year holiday," a trader at
one international trading firm said.
The Lunar New Year falls on Jan. 31 this year.
Sources last week said Glencore Xstrata's Pasar
copper smelter in the Philippines planned to restart as soon as
January 15, after being damaged by Typhoon Haiyan in November.
(Editing by Tom Hogue)