Rising supply to boost China copper concentrate processing fees-trade

Fri Jul 26, 2013 6:24am EDT
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* Restart at Grasberg, startup of Oyu Tolgoi prompt offers

* Spot concentrates change hands at $72/7.2 cents TC/RC this week

* TC/RCs may rise to $90/9 cents in Q3 - smelter

By Polly Yam

HONG KONG, July 26 (Reuters) - Copper smelters in China are poised to raise by at least 10 percent the processing fees they charge sellers of raw material spot concentrates in the coming months as they take advantage of rising supply.

That could indicate ramped up capacity and higher output at these smelters, offsetting at least some of the lost output at smelters that use copper scrap as raw material due to a shortage of scrap. It may ultimately ease the metal import needs of the world's top consuming and producing nation of refined copper.

Supply of concentrates has increased after Freeport-McMoRan Copper and Gold Inc's Grasberg mine in Indonesia resumed near normal production and Mongolia's giant new Oyu Tolgoi mine started shipping to China earlier this month.

Traders said offers of spot concentrates had risen further this week and sellers were willing to pay higher fees.

Reflecting the increased supply, treatment and refining charges (TC/RC) settled at $72 per tonne and 7.2 cents per pound this week for clean, standard spot shipments to China.   Continued...