China's top copper smelters will receive fees nearly 30 percent higher than a week ago for processing 10,000 tonnes of spot Chilean copper concentrate bought at a tender on Friday, the smelters' raw material purchasing group said on Monday.
China Smelters Purchase Team, which groups the country's seven largest producers and accounts for 80 percent of China's copper concentrate imports, agreed to receive fees of $67 a tonne/6.7 cents a pound to process the concentrate into metal.
This compared to $52 a tonne/5.2 cents a pound agreed for two 10,000-tonne shipments last week, a Team official said.
He said the Team had bought the cargo from an international trading house. The 10,000 tonnes, from Chile's Antamina copper mine, would be loaded in July for delivery to member smelter Baiyin Non-ferrous Metals.
The processing fees, commonly called treatment and refining charges (TC/RCs), are paid by sellers to smelters. The fees are subtracted from the sale price, which is based on the metal content of the concentrate and the London Metal Exchange (LME) cash price.
The Team official said the base price for the latest shipment would be set one month after loading.
TC/RCs have soared over the past two months, as global supply of copper concentrate is expected to rise in the second half of the year, due mainly to higher output from two of the world's three largest mines, BHP Billiton's Escondida in Chile and US-based Freeport McMoRan's Grasberg mine in Indonesia.
Freeport said it restarted high-grade mining at Grasberg in April after a rock slide late last year, which had contributed - along with huge demand from Chinese and Indian smelters - to a slump in benchmark East Asian term TC/RCs to their lowest in two decades for first-half 2004.
Baiyin had bought three shipments totalling 30,000 tonnes of copper concentrate, including last Friday's 10,000 tonnes, in the past two weeks, ahead of the planned resumption of its 70,000-tonne-per-year plant on July 20, a Baiyin official told Reuters.
The plant was temporarily closed on May 19 for maintenance and an upgrade that would boost capacity to 100,000 tonnes.
The official said the upgrade was expected to finish in September, about two months behind the previous schedule. "The refining part has been completed but the smelting part is not ready," he said.
He said Baiyin would consider importing more concentrate at TC/RCs of $70 to $80/7.0 to 8.0 cents.
Team members received spot TC/RCs of $50 and 5.0 cents for a total of 30,000 tonnes in mid-June and $35 to $37.5/3.5 to 3.75 cents for 55,000 tonnes in the previous few weeks, against $25/2.5 cents in the January-March quarter.
Other members of the Team are Tongling Non-ferrous Metals (Group) Co, Daye Non-ferrous Co, Jiangxi Copper, Yunnan Copper, Jinchuan Non-ferrous and Zhongtiaoshan Non-ferrous.
Benchmark three-month LME copper was trading at $2,669/$2,674 by 0617 GMT on Monday, up from $2,650 at the close in London on Friday and about 50 percent higher than a year ago.
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