SYDNEY -(Dow Jones)- A major copper concentrate seller has settled annual fees for 2010 to smelt the raw material into refined metal at $42 a metric ton and 4.2 cents a pound, Goldman Sachs JBWere said in a note Monday.
This is a major fall for annual fees, known as treatment and refining charges, from $75/ton and 7.5 cents a pound for 2009. Market participants have predicted a fee range of $40-$50/ton.
Should this deal emerge as the global benchmark, many smelters will struggle to turn a profit.
"We understand from our industry contacts that a major seller of custom concentrate has settled contract terms for calendar 2010 at $42/ton and 4.2 cents/lb," Goldman Sachs JBWere said in the note, without elaborating.
Lead players in the annual setting of TC/RCs include BHP Billiton Ltd. (BHP), which operates the world's largest copper mine, and Chile's Escondida, as well as U.S.-based Freeport McMoRan (FCX).
Their major customers are smelters in China and Japan, such as Jiangxi Copper Co. (600362.SH) and Pan Pacific Copper Co.
-By Elisabeth Behrmann, Dow Jones Newswires;
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