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Antofagasta agrees to lower copper prices to $80 per ton in 2024

Foreign media reported on November 18 that Chilean miner Antofagasta agreed to reach a processing and refining fee of US$80 per ton and 8 cents per pound with Chinese smelter Jinchuan Group for the supply of copper concentrate next year, three sources said on Saturday. protocol.

What miners pay smelters to process the ore into refined metal is 9% lower than the 2023 baseline level of $88 per ton, 8.8 cents per pound, agreed around the same time last year.

Antofagasta declined to comment, and Jinchuan did not respond to a request for comment.

Global miners and China’s largest smelters typically negotiate copper concentrate contracts at this time of year and settle TC/rc for the following year.

When more supply becomes available and smelters can demand better feedstock terms, TC/rc rises, and when supply tightens, TC/rc falls.

Jinchuan is China’s fourth-largest copper producer. It is unclear whether other smelters will agree to the same price in negotiations with Antofagasta and other miners.

One source said some large smelters will discuss the issue on Saturday. The source declined to be named due to the sensitivity of the issue.

Copper prices this year are set by global miner Freeport-McMoRan Inc. Shares of both U.S. and Chinese smelters are at six-year highs.

Market participants polled by Reuters ahead of this week’s talks mostly forecast the TC benchmark in 2024 to remain at or below this year’s levels.

The supply of copper concentrate is expected to be sufficient next year. Due to sufficient supply, China’s large copper smelters have raised the TC/rc lower limit to a six-year high of US$95/9.5c in the third and fourth quarters.

However, FM ore processing at First Quantum Minerals has recently decreased. Sources told Reuters this week that negotiations over next year’s fees at TO Cobre’s Panama mine have been complicated by protests.

Uncertainty about how much FCX will be supplied in Freeport-McMoRan. The export license for Indonesia’s N Grasberg mine will expire in June next year, which also brings some difficulties to predicting market balance.

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