Japanese smelters will push for their first hike in copper processing fees in more than three years in 2009, aiming to almost double the price due to an expected rise in the raw material's availability, industry officials said.
Japanese copper smelters and global miners including BHP Billiton Ltd-Plc have yet to agree on next year's fee to process copper concentrate into the metal, which is widely used in construction and electronic appliances.
Spokesmen at Sumitomo Metal Mining Co Ltd and Pan Pacific Copper Co Ltd said the next round of negotiations were likely to take place before the middle of January. Pan Pacific, a unit of Nippon Mining Holdings Inc, is Japan's top copper producer.
Processing fees are a major source of revenue for smelters. Copper smelters in China, the world's top consumer of the industrial metal, are seeking treatment charges of $82-$83 per tonne and refining charges of 8.2-8.3 cents per pound for calendar 2009. "Our thinking is the same as that of the Chinese smelters," a spokesman at Sumitomo Metal said.
In this year's mid-year talks Japanese copper smelters mostly agreed on treatment and refining charges of $45/4.5 cents, though reports suggested that some processing fees were agreed as low as $42.5/4.25 cents. The spokesman declined to comment on specific price levels when asked about whether Sumitomo Metal was seeking to reach a deal above $80, although he said a low level was unacceptable. Smelters typically have two types of annual agreements with miners: one, which begins in January, and a second, which starts in July.
A spokesman at Pan Pacific also declined to discuss details of the negotiations but said the current business environment in the industry called for higher processing fees. "There is more copper concentrate available and the TC-RC should reflect the change in the situation," he said.
Copper processing fees have either fallen or remained unchanged since mid-year fees for the 2005/06 period due to tight concentrate supplies, which increased the competition over raw materials among smelters. Supply is expected to surpass demand next year, however, given sharp falls in the prices of copper and sulphuric acid, a by-product of smelting. Copper on the London Metal Exchange fell to close at $2,870 a tonne on Tuesday, after earlier hitting a four-year low.
Comments
Comments are closed.