Japan Mid-Term Copper Smelting Fees May Fall; Talks On
25 Junio 2009 - 2:37AM
Noticias Dow Jones
Japanese copper smelters are yet to agree on mid-term treatment
and refining charges, but hopes of coming close to last year's
mid-term prices of around $45 a metric ton and 4.5 cents a pound
are looking slim, market watchers said Thursday.
Lower mid-term fees will be a welcome development for miners who
are already faced with much lower copper prices of around
$5,000/ton, down from a record $8,940/ton last year.
"Talks for copper TC/RCs aren't finished, and we don't disclose
any details before they're settled," said a spokesman for Sumitomo
Metal Mining Co. (5713.TO), Japan's second-largest copper
smelter.
A spokesman for Mitsubishi Materials Corp. (5711.TO), Japan's
third-largest smelter, also said there was no settlement yet, and
declined to give detail. A spokesman for top producer Pan Pacific
Copper Co. couldn't be reached for comment.
Mid-term supply contracts with miners such as BHP Billiton Ltd.
(BHP) start from July 1, and talks may continue until
late-July.
Spot processing fees this month falling to below $30/ton and 3
cents a pound indicate mid-term charges around last year's levels
will prove difficult to achieve.
"Earlier indications pointed to mid-term charges of $45/ton and
4.5c/lb but with spot prices falling, especially so in China, this
will put smelters under pressure," said Moira Daw, an analyst at
Sydney-based AME consultancy.
"I suspect TC/RCs will come in closer towards the $30/ton level
rather than the $45/ton," Daw said.
Falling processing charges indicate a concentrate market in
balance or short supply, so smelters have to lower their terms to
compete for raw material.
Production cuts at older mines such as a 30% output drop at
BHP's majority-owned Escondida mine in Chile have tightened the
concentrate market, while strong demand in China is also likely to
have played a role, analysts said.
Chinese copper concentrate imports, chiefly sourced from South
America, Mongolia and Australia, in May rose 23% on year to 508,902
tons. For the January-May period, imports gained 6.7% to 2.44
million tons.
Separately, German copper smelter Aurubis AG (NDA.XE) said it
expected smelter charges to miners to rise, after some spot market
deals concluded at less than $30/ton and 3 c/lb.
Delays in Chinese ports in clearing imported copper scrap and
the disappearance of the Shanghai Futures Exchange and London Metal
Exchange arbitrage have resulted "in a far reaching withdrawal of
Chinese buyers from the market, with the result that the situation
for European buyers has improved," Aurubis said.
Annual TC/RCs settled at $75/ton and 7.5 a pound in January, and
the fees essentially represent a smelter's profit margin on refined
metal.
-By Elisabeth Behrmann, Dow Jones Newswires; 61-2-8272-4689
elisabeth.behrmann@dowjones.com