Japan Copper Smelters Accept Lower Margin

Japanese copper smelters agreed with offshore copper ore suppliers to reduce the treatment and refining charge by 25% for 2008-09 shipment from previous year. Sumitomo Metal Mining agreed with Freeport-McMoRan Copper & Gold as BHP Billiton. Japanese largest copper smelter of Pan Pacific Copper apparently accepts the condition though the firm doesn’t disclose the detail. Sumitomo Metal Mining agreed with BHP Billiton last week at US$ 45 per tonne of treatment charge and 4.5 US cents per pound of refining charge compared with US$ 60 per tonne of treatment charge and 6 US cents per pound of refining charge a year ago. The firm also agreed with Freeport-McMoRan in the week at the condition. The ore purchase condition is lower than US$ 47.20 per tonne of treatment charge and 4.72 US cents per pound of refining charge, which BHP Billiton agreed with Chinese smelters. Japanese industry source said the condition would be same as Chinese smelters due to adjustment in collateral condition. Pan Pacific Copper also completed the negotiation with Freeport-McMoRan but the firm doesn’t disclose the detail when the firm will negotiate with other miners in early February. Japan Mining Industry Association’s chairman Akihiko Ide, who is president of Mitsubishi Materials, said at regular press conference on Wednesday copper smelters could get better copper ore purchase condition around 2010 when copper ore supply could meet strong demand.