Copper Ore Price Negotiation Japanese Smelter and Escondeda cooper mine Were Broken Off

The copper material price negotiation in the end of 2005 between Japanese major smelter, Pan-Pacific Copper and Escondeda cooper mine in Chile were broken off. They couldn’t bridge the gap between their price negotiations although Japanese smelters made the request in the treatment charge at US$95 per tonne or the refining charge at 9.5 cents per pound and Escondeda laid out TC (Treatment Charge) at US$92 and RC (Refining Charge) at 9.2 cents. Escondeda keeps strong as background the price strategy of BHP Billiton which is holding company of Escondeda.Escondeda already settled the price negotiation in the end of 2005 with Chinese smelters TC at US$90 or RC 9 cent and with Poland’s smelters TC at US$88.5 and RC at 8.85 cents. Consequently, Escondeda lay out higher price toward Japanese smelters than the price for Chinese and Poland’s smelter. Yoshihiro Nishiyama, director of Pan-Pacific Cooper, analyzed that there is BHP Billiton’s price strategy to build up the power of domination in the copper material field. In the price negotiations in the middle of 2005, Japanese smelters and Octedy mine settled TC at US$115 and RC at 11.5 cents. After that、Japanese smelters and Escondida settled TC at US$112.5 and RC at 11.25 cents which was advantageous terms which was better than Octedy mine. Mr. Nishiyama said that Escondeda has the speculation to make benchmark for the copper price negotiation.Japanese smelters think that they don’t negotiate with Escondeda’s speculation and they are being cautious other mine lay out grueling conditions for Japanese smelters.Copper ore price negotiation between the copper smelters and the mines have in the middle of the year for June-July and in the end of the year from November. In the negotiation in the end of the year, Japanese smelters purchase the refined copper ore at total about 400,000 tonnes from Escondeda.