latest spot copper concentrate sale from BHP Billiton
Plcs Antamina Mine in Peru suggests traders are
positioning themselves for a tightening in treatment and
refining charges (TC/RCs) over the next few months.
BHP has agreed to sell
two 10,000-tonne parcels of the Peruvian material to a trade
buyer at $60 to $64 per dry metric tonne/6 to 6.4 cents per
pound for delivery through August and September, external
The tender was
concluded early June 12, shortly before Phoenix-based
Freeport-McMoRan Copper & Gold Inc. declared force
majeure at its Grasberg Mine (
amm.com, June 12), where production stopped
following an accident that killed 28 people and injured 10.
The spot tender also
followed soon after BHPs conclusion of discussions to
supply a Japanese smelter with concentrates through the second
half of the year. That deal was at a TC/RC charge of $72 per
dmt/7.2 cents per pound, with BHP conceding $2/0.2 cents over
the terms reached at the start of the year, market sources
"BHP must be kicking
themselves," one concentrates trader told AMM sister
publication Metal Bulletin shortly after the Grasberg
force majeure was announced, adding that the Antamina
deal indicates that the market is already betting TC/RCs will
tighten while Grasberg is out.
"That would suggest
the market is already reacting to this, in the sense that
someone seems to be willing to take a punt on a tighter market
in August and September," he said.
The last time Grasberg
halted operations in 2011, spot TC/RCs tumbled to about $20 per
dmt/2 cents per pound, and in some cases traders even bid flat
to the LME price to secure high-quality concentrates.
But today, with or
without Grasberg, there is a lot more copper concentrate
around, and providing it comes back online within the one- to
three-month timeframe that most observers forecast, the effect
on processing terms will be less dramatic.
A version of this
article was first published by AMM sister publication Metal