|  | 05/07/2004 |
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Negotiations of Purchase of Ore Come to an End
The negotiations of purchase of ore between smelters and mine owners come to an end in the middle of 2004. The conditions of purchase of ore became the hardest result ever for the domestic smelters due to tightness of supply and demand of ore for last year. However, it will be the focal point of the negotiations if the smelters can get the favorable term from the mine owners in the background of the expansion of ore supply by the sharp rise of the copper price.
The first negotiations between major mine owners in Chile, etc. and domestic smelting companies have already been executed by the first half of last month, and the second negotiations will be performed in North America and Japan in the middle of this month as the final negotiations. The negotiations of last year had rough going by the firm attitude of mine owners.
The negotiations will not have the worry of having rough going relatively since both the mine and smelting are sharing the perception about the present state of affairs that the ore's supply-demand will ease in the future.
About the supply and demand of copper and ore through 2004, copper would be above 270,000 tonnes, and it is likely to expand to 360,000 tonnes in 2005. Thanks to ore's easing of supply and demand, the situation which smelting capacity in the world is limited would change completely and work advantageously for the smelting firms in the negotiations.
TC(taking-up and smelters' costs)/RC(refinery costs) in January-February 2004 vanished because China's purchase of ore overheated from the end of 2003 to the beginning of 2004 and there was a cave-in accident in world-famous Grasbarg mine in Indonesia. After these incidents, however, it rose to 53 dollars/5.3 cents through May-June.
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