China Copper Smelters Seeking 74% Rise In 2009 TC/RC -Sources
Monday December 22nd, 2008 / 12h12
BEIJING -(Dow Jones)- China's copper smelters are seeking a 74% rise in treatment and refining charges, or TC/RCs, for 2009, from $47.2 a metric ton and $4.72 cents a pound in 2008, industry executives said Monday.
Australia miner BHP Billiton Ltd (BHP) offered $52.5/ton for TC or a 11% hike from last year's level in the second round of talks with Chinese smelters, said an official with the Chinese smelters' purchase team.
TC/RCs, which have been falling steadily in recent years because of a tight global market, rose recently in the spot market along with a fall in demand for metals.
To calculate the price of concentrate - the raw material from which copper is made - miners deduct these charges from the three-month London Metal Exchange copper price. A lower processing charge means smelters get more expensive concentrate.
The Chinese team comprises nine major copper smelters in the country, which is the world's biggest producer of the metal.
It holds annual negotiations with global miners at the end of every year to set details of term contracts for the next year.
"We think $82.5/ton is a proper level for (TC) 2009," said the official, declining to be named.
"Market demand and supply will be balanced, as miners' output will be about 800,000 tons higher than 2008," said an industry executive with one of the smelters.
In the talks with Japanese smelters, Chinese industry players said BHP Billiton has asked for a TC of $55.5/ton, while Japanese smelters said the level should be $80-85/ton.
China won't participate in the midyear talks, like Japanese smelters, the official added.
-Juan Chen contributed to this story; Dow Jones Newswires; 8610 6588 5848; juan.chen@dowjones.com
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