Copper miners and smelters are getting closer and closer to reaching TC/RC.

Major copper miners and Chinese smelters are close to reaching an agreement on treatment and refining costs (TC/RC) for 2022, two people familiar with the talks said on Friday.

TC/RC is paid by the miners to the smelter to process the copper concentrate into refined metal. The first settlement of major miners and smelters in China, a large copper consumer, in annual negotiations usually serves as a benchmark for the coming year and plays an important role in determining profitability.

A mining source said that according to the treatment fee benchmark they wanted, the price difference between the two sides was $8 per tonne, with the smelter's offer of about $69 per tonne and the miner's offer of $61.

The gap narrowed from last month, when miners sought to extend the benchmark price agreed by Freeport-McMoran this year to $59.50 a tonne, while smelters targeted $70, the source added.

In recent years, Chile's Antofagasta (Antofagasta) has also set a benchmark.

TC/RC rises when there is more supply and smelters can demand better conditions.

Another source who owns a major smelter said one of the miners was willing to settle at a low level of $60, while the other took a "very similar" position.

"We may raise it to $70 or very close to $70. Our data reflect the real market balance. " The smelter source, who spoke on condition of anonymity, said he warned that negotiations could still be difficult.

Analysts expect the copper supply crunch that caused the TC/RC benchmark to fall six times in a row to ease in 2022, although the potential closure of the Las Bambas mine in Peru could change market balance forecasts.

"most people agree-well, maybe not miners-that the market will be weak next year. The increase in mine production will exceed the capacity of the smelter." One trader said after the meeting that he thought the two sides would agree on a price of about $60.