Metals News
China Rejects Copper TC/RCs at $40/4c
industry news
Dec 7,2009

SHANGHAI, Dec. 1 -- Chinese smelters suspended annual talks on copper treatment and refining charges (TC/RCs) with overseas suppliers after being offered fees below production cost, sources report.

    Representatives from China's biggest smelters, including Jiangxi Copper and Tongling Nonferrous, ended collective negotiations for TC/RCs in 2010 after overseas miners offered at $40 per tonne/4 cents per lb.

    "Average production cost is around $50-65/5-6.5 for the Chinese smelters, although it varies from company to company," said Zhao Bo, vice director of the copper department at the China Nonferrous Metals Industry Co.

    The talks are conducted on the Chinese side by a group known as the copper smelters purchasing team (CSPT), made up of senior officials form each of the biggest smelters.

    The talks normally conclude by the end of the year, but this time they may not end until February next year, market sources predicted.

    Spot TC/RC offers in China have fallen as low as $8/0.8c, with few takers, especially among the larger smelters.

    "Actually CSPT members rejected spot offers any lower than $40/4 as early as the third quarter, ahead of the annual talks," said an analyst from Antaike.

    The CSPT usually begins the annual talks with Freeport McMoran and other suppliers in October.

    The smelters usually take 80% of material against the annually agreed fees, and take the remainder from the spot market.

    (Source: Metal Bulletin)

China Smelters Purchase Team CSPT
copper Cu
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