Japan Cu Industry Appreciates BHP Billiton’s Renunciation for Rio Tinto Merger

Japanese copper industry appreciates BHP Billiton’s renunciation for acquisition of Rio Tinto, said Nobuyoshi Soma, the chairman of Japan Mining Industry Association and the president of Furukawa at the association’s regular press conference on 28 November. Japanese copper industry was concerned about oligopoly advancement in copper concentrate supply by the merger. Terms of copper ore contracts were expected to become even severer for Japanese copper smelters than the present if BHP Billiton succeeded in the acquisition.

Mr. Soma also referred to the copper ore price negotiations for 2009-2010 shipment which started around LME dinner held in October. Mr. Soma said electrolytic copper demand forecast by Japanese smelters and overseas ore producers became useless after global financial market came into confusions. As a result, smelters and ore producers could not find any concrete goals for 2009-2010 contracts then, he said.

Japanese copper smelters started the second price negotiation with Escondida of Chile in November. However, Mr. Soma said the talk was untimely and there was any remarkable advancement. They found the same situation in the negotiation with Freeport McMoRan Copper & Gold of USA. Copper ore price negotiation for 2009-2010 shipment is unforeseeable, he said.

Meanwhile, Mr. Some showed an expectation that ore purchasing terms might become rather advantageous to Japanese smelters when copper demand conditions significantly changed after summer due to global financial crisis. Terms for spot ore purchasing are already improving for Japanese smelters. Mr. Soma said the ore price negotiation for 2009-2010 shipment is very important to reflect current changes in global copper market precisely.