Freeport and four Chinese smelting companies finalize a 4% reduction in 2021 copper concentrate processing fees

Freeport-McMoRan Fallon (Freeport McMoRan), a top executive said on Monday that Freeport has been with four Chinese smelting companies reached an agreement in 2021 of copper concentrate processing fee (TC / RCs) down 4%. This also indicates that the annual TC/RCs will decline for the sixth consecutive year.

Source:https://fcx.com/

Javier Targhetta, senior vice president of marketing and sales at Freeport and president of Atlantic Copper, said that with China Copper, Jiangxi Copper, Tongling Nonferrous Metals and Jinchuan Group, they have agreed that the processing fee for copper concentrate next year will be US$59.50 per ton. And 5.95 cents per pound.

The processing fee for copper concentrate in 2021 is lower than the 2020 US$62 per ton and 6.2 US cents per pound. The supply of concentrates in China, the world's number one consumer, is tight and demand for raw materials is rising.

The copper concentrate processing fee, which is the first to be finalized during the negotiation period, is usually regarded as the price benchmark for the next year and provides a reference for global supply contracts.

The negotiations between Freeport and Chinese companies started later than in previous years. The new crown epidemic made the face-to-face negotiations in Shanghai in November impossible. The 2021 copper concentrate plus fee agreed by the two parties is the lowest level since 2011. The copper concentrate processing fee for that year was US$56 per ton and 5.6 cents per pound. Since 2016, the processing fees of copper concentrates have fallen year after year.

A source from a Chinese smelting company revealed that in view of the current spot processing fees, the results were better than expected."

"If the (lower) processing costs are maintained for a long time, it is not good for smelting companies. Mining companies are still in an overly strong position."

According to Asian Metal (Asian Metal) estimates, China's spot copper plus I fee has dropped to the lowest level in eight years at US$50.50 per ton.