ASIACOPPERWEEK-Freeport-McMoRan Sees ‘Tough’ 2023 Copper TC/RC Negotiation
By Mai Nguyen
SINGAPORE, November 22 (Reuters) – Freeport-McMoRan Inc FCX.N expects tough negotiations with Chinese smelters for 2023 copper concentrate treatment and refining charges (TC/RC) this week amid market uncertainties and a potential surplus, a senior company official said Tuesday.
“(Negotiations are) more difficult because the balance of the market changes a bit. There could be a slight surplus – a small tonnage,” Javier Targhetta, senior vice president of marketing and sales at Freeport, said in a statement. interview during the annual Asian Copper Week an event in Singapore.
Miners pay TC/RC to smelters to turn copper concentrate into refined metal, offsetting the cost of the ore. TC/RC increases when supply is greater and smelters can demand better terms on raw materials.
“We’re aiming for something in the $70s but I don’t think that will be accepted by the foundries, so I would say somewhere in the $80s. I’d rather aim low $80 and let’s see what happens,” said Targhetta, who is also president of Atlantic Copper.
After of them years of online meetings due to COVID, some Chinese smelters are meeting with miners in person in Singapore to discuss TC/RC regulations.
The The TC/RC benchmark, referenced in supply contracts globally, is typically taken from the first settlement between a major miner and a smelter in China’s major copper consumer in annual negotiations.
Phoenix, Arizona-based Freeport, the world’s largest publicly traded copper miner, This year pegged the benchmark at $65 a ton and 6.5 cents a pound, but major Chinese copper smelters have already raised their TC/RC floor in the fourth quarter to a five year high from $93 and 9.3 cents per poundexceeding the reference.
Most market participants see the 2023 processing fee reference in the Range of $80 to $90but one miner was considering $70 and two smelter sources were expecting $100.
“I don’t feel like our customers come here ready to move in. It’s a perception and I could be wrong. If we find common ground, of course I’m ready to move in. “, he added.
Punctual CT AMM-CN-CUCONCpriced by Asian Metal, stood at $85.50 a ton on November 17, up 43.7% since the start of 2022 and higher than the reference. However, spot transactions represent only a small fraction of the concentrates market.
“Too much emphasis is placed on spotting TC/RCs every time,” Targhetta said. “That could change in two months.”
Freeport expects the market to need an additional 120 million tonnes of copper by 2040 to meet its long-term consumption needs, particularly in the renewable energy and electric vehicle sectors, it said. -he adds.
“At some point, and I don’t know when it will be, there will be a real shortage of copper to meet this potential demand.”
Current copper prices – around $8,000 per tonne on the London Metal Exchange CMCU3 – are inenough to spur new investment, and uncertainty remains for the Russian-Ukrainian war and Chinese economic growth, he added.
(Reporting by Mai Nguyen in Singapore; Editing by Richard Chang)
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