Smelters, BHP settle 2012 copper charges

[] — CHINA’S copper smelters and global miner BHP Billiton have settled 2012 term copper concentrate treatment and refining charges at $60 a tonne and 6 US cents a pound, trade and smelter sources said on Wednesday.

This is higher than the benchmark annual term price for 2011 of $56.5 and 5.65 cents, but down from the $63.5 and 6.35 cents Freeport McMoRan Copper and Gold agreed for clean, standard copper concentrate with Chinese smelter Jiangxi Copper and Japan’s Pan Pacific Copper for 2012.

“India signed $60 and 6 cents with BHP first and that made our talks more difficult,” a trading source at a large smelter said.

The deal was done late last week for concentrate deliveries from the world’s No. 1 copper mine Escondida, majority-owned by BHP, the smelter sources said.

Part of Chinese smelters’ 2011 shipments for delivery in the second half from Escondida would be delayed to 2012, after the Chilean mine lifted a strike-driven force majeure in September last year, making BHP unwilling to give a bigger rise in term TC/RC for this year, a smelter source said.

TC/RCs are paid by miners to smelters for converting concentrate into refined metal.

A source at Jiangxi Copper said the firm would receive 20,000-30,000 tonnes of Escondida concentrates from BHP in 2012, smaller than the around 100,000 tonnes Freeport would deliver to the firm this year.

In 2011, Chinese smelters and BHP failed to set yearly TC/RCs for term concentrate deliveries. Insteady they set TC/RCs in half-year charges for the first time, agreeing to $72 and 7.2 cents for the first half of the year and $90 and 9 cents for the second half.

The BHP charges are higher than the $55-$58 and 5.5-5.8 cents that traders had expected and TC/RCs for spot concentrates.

Spot standard, clean concentrates to China were being indicated at TC/RCs of below $50 and 5 cents, traders said. Offers were at TC/RCs of below $30 and 3 cents in November to December 2011.

“The rise in TC/RC global miners have agreed to the Chinese are telling us the global concentrate market may be not as tight as we have expected,” a trader at an international trading house said.