Reuters reported that China's top copper smelter Jiangxi Copper Company and global miner Freeport McMoRan Copper & Gold Inc have agreed 12.4% rise in term treatment and refining charges for 2012 concentrate shipments, a Jiangxi Copper source said on Saturday.
The 2012 TC and RCs have been set at USD 63.5 per tonne and USD 6.35 cents a pound up from USD 56.5 and 5.65 cents for full year of 2011 for standard clean concentrates.
The Jiangxi copper source with direct knowledge of the terms said that "That should be the benchmark for the Chinese smelters and Freeport in 2012. Jiangxi Copper would continue to receive about 100,000 tonnes of term concentrates the main raw material for the production of refined copper, from Freeport's mines in 2012 flat from 2011.
The firm had already received all term concentrates from Freeport this year. The price rise will be the second straight year the smelter has won higher TC and RCs from the global miner despite the ongoing strike at Freeport's Grasberg mine in Indonesia which this week was extended into a third month to December 15th 2011.
TC and RCs are paid by Freeport to Jiangxi Copper for converting its concentrate into refined metal and deducted from concentrate sale prices based on London Metal Exchange copper prices. Higher charges, typically seen when supply rises or demand falls in the global market cut concentrate import prices to the Chinese the world's top copper concentrate importer.
The source said that Jiangxi Copper expects overall supply of copper concentrate in the global market to rise in 2012 and may see a surplus after 2013 as new capacity comes on the stream. Jiangxi Copper was the first Chinese smelter to agree to the 2012 TC and RCs rates with Freeport.
Sources in China said that copper smelters including Jiangxi Copper would meet global miner BHP Billiton Limited in the coming weeks for the TC and RCs talks for 2012.
In 2011, Chinese smelters for the first time set half year TC and RCs for term concentrate deliveries with BHP agreeing to charges set at USD 72 and 7.2 cents for the first half and USD 90 and USD 9 cents for the second half. The smelters face a shorter pricing period in 2012 because BHP may consider switching to quarterly TC and RCs.
(Sourced from Reuters)
