Japan Copper Smelters to Fight with Miners at Ore Buy Talk

Japanese copper smelters seek better price participation system and payment condition to offshore miners at the ore purchase negotiation for 2007-8 shipment. The smelters accepted lower treatment charge and refining charge and unfavorable price participation condition at mid-year negotiation for July 2006-June 2007 shipment under tight supply of ore. The smelters decided to fight with miners when the miners are expected to offer lower charges and termination of price participation. The smelters seek better condition for the price participation system, in which smelters can get 10% of profit when copper price increases to more than basic price though miners get 90% of the profit. The basic price increased from 90 US cents per pound to 120 cents and they agreed to set the maximum price at 180 cents. With the condition, smelters can get only 6 cents even if copper price would increase to more than 300 cents as now. The smelters also try to improve the payment condition, under which smelters have to pay cash to miners 3 days after ore vessel arrives the port of smelters’ side. However, smelters take 3 months to make copper ingot and smelters have to pay interest during the period. The smelters offer to change the condition to pay 3 months after the ore arrival.