* Term 2015 TC/RC to China at $100-$110/T, 10-11 c/lb -smelters
* Smelters, miners to meet next month
* Codelco to buy 300,000 T standard concentrates for 2015 - source
By Polly Yam
HONG KONG, Oct 29 (Reuters) - China’s copper smelters may be paid between 9 percent and 20 percent more in fees for processing raw material concentrate next year by global miners, reflecting higher world mine production, executives at smelters and traders said.
Chinese smelters expect the benchmark treatment and refining charges (TC/RC) for term shipments of clean, standard copper concentrate to rise to $100-110 per tonne and 10-11 cents per pound in 2015 from $92 and 9.2 cents in 2014.
TC/RCs are paid to smelters by sellers to convert concentrate into refined metal and are deducted from the smelters’ purchase prices. As the supply of concentrate increases, the demand for smelting capacity and the charges also rise, translating into higher profits for smelters.
Mine output is estimated to rise 8.6 percent year-on-year in 2015, according to Reuters’ data.
Chinese smelters had earlier expected the 2015 TC/RC at about $115 and have lowered expectations slightly after discussions with global miners in the LME Week in London last week. Miners had not put forward any number in the discussions, smelter executives said.
Miners were unwilling to give a big rise in term 2015 TC/RCs, arguing that there would be competing demand for their production from some new mines who wanted to blend the purchases with their own production of lower grades, said one of the executives, who declined to be named because he was not authorised to talk to media.
“If we got $105 and 10.5 cents, it should be a good one,” said the executive.
But many Chinese smelters believe those purchases for blending would not be enough to affect 2015 term TC/RC substantially, said another executive at a large smelter.
Smelters and miners, including Freeport-McMoRan and BHP, are set to hold the first round of formal talks next month and the smelters may put initial bids at $115-$120 and 11.5-12 cents, said the two executives and an industry source.
Global miners probably aimed to settle below $100 and 10 cents TC/RCs in 2015, said a source at a Western miner.
Chinese smelters and Freeport settled TC/RC for 2014 at $92 and 9.2 cents. Smelters failed to settle full-year charges with BHP but agreed $99 and 9.9 cents for the first half of 2014.
Pan Pacific Copper, Japan’s biggest copper smelter, has aimed for more than $100 and 10 cents TC/RC in 2015, while smelters in Europe expect $105-$115 and 10.5-11.5 cents.
Demand for clean, standard concentrates for blending is rising as new mines came on stream, including Codelco’s Ministro Hales in Chile and Chinalco’s Toromocho mine in Peru.
Concentrates from the two mines contain more than 0.5 percent arsenic, the maximum allowed in imports by the world’s top buyer China.
Blended concentrates typically carry higher charges than standard grades, depending on impurities.
Codelco may buy about 300,000 tonnes of clean, standard concentrates from the international market in 2015 to blend with about 30,000 tonnes of concentrates from Ministro Hales to sell to China, said the industry source who has knowledge of Codelco operations.
A Codelco representative in Chile declined to comment.
The expected purchase by Codelco is equivalent to a quarter of China’s record imports in September.
The Codelco blended concentrates are expected to sell to China in 2015 with TC/RCs about $10 and 1 cent more than standard grades. (Additional reporting by Fabian Cambero in SANTIAGO and Melanie Burton in SYDNEY; Editing by Muralikumar Anantharaman)