China Smelters Seek to Maintain, Improve Copper Fees

BEIJING, Oct. 30 -- Copper smelters in China, the biggest user, will seek to improve or at least maintain raw material processing fees for next year at talks starting soon, said Chen Hongzhou, vice manager of the marketing department at Chinalco Luoyang Copper Co.

    The negotiations may be difficult as mining companies view the Chinese metals market as currently in a "boom," Chen said in an interview today in Hong Kong.

    Japanese smelters and BHP Billiton Ltd., the world's biggest mining company, settled mid-year fees at a 33 percent discount compared with contracts started six months earlier, an industry group said on July 23, setting a regional benchmark.

    The smelters agreed to fees of $50 a metric ton for smelting and 5 cents a pound for refining for the year that began July 1, Masanori Okada, chairman of the Japan Mining Industry Association, told reporters.

    Processing fees for immediate delivery have slumped this year because lower ore grades and declining mine output cut raw material supplies. The so-called treatment and refining charges, or TC/RCs, usually drop when there is a shortage of raw material and smelters have to compete for deliveries.

    (Source: Bloomberg)