London 15/04/2016 - BHP Billiton has concluded its deals for copper concentrates supply for the second quarter with smelters with treatment charges and refining charges (TC/RCs) of $83-85 per tonne/8.3-8.5 cents per pound, according to well-informed sources.
"Most of the negotiations were carried out in March when the spot market was in the $80s. This number reflects market conditions," a source close to the matter said. "The numbers apply to smelters in Japan, South Korea and China."
Miners pay TC/RCs to smelters to turn concentrate into refined metal, with the charges deducted from the smelters' sale price.
The rate of $83-85/8.3-8.5 cents is down from the TC/RCs in the first quarter at $86-90/8.6-9.0 cents.
"Their initial offers for TCs were in the high $70s and we have roughly a $10 gap between our bids and offers," a smelting source said.
Spot TC/RCs in March were largely in a range of $84-91/8.4-9.1 cents but have increased to $88-93/8.8-9.3 cents this week, according to FastMarkets' assessment.
BHP offers a mixture of annual, half-year and quarterly contracts to smelters.
The miner has been trying to move away from annual supply contracts for years, preferring to sell under shorter-term contracts - by the quarter or the half-year. Consequently, it does not to follow the industry benchmark, which for 2016 has been set at $97.35/9.735 cents - following a key agreement in December between miner Antofagasta and Chinese smelter Jiangxi Copper.
(Edited by Mark Shaw)