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MarketScreener Homepage  >  Equities  >  SHENZHEN STOCK EXCHANGE  >  Tongling Nonferrous Metals Group Co.,Ltd.    000630   CNE000000529

TONGLING NONFERROUS METALS GROUP CO.,LTD.

(000630)
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Miners, smelters still divided on copper processing charges

11/27/2020 | 12:25pm EST
FILE PHOTO: Molten copper is poured at the KGHM copper and precious metals smelter processing plant in Glogow

(Reuters) - Copper miners and smelters are late agreeing charges for processing concentrate for next year, three sources with knowledge of the talks said, with smelters seeking a rollover while miners are pointing to a tight spot market.

Miners pay smelters treatment and refining charges (TC/RCs) to process copper concentrate into refined metal.

The first settlement between a major copper miner and a Chinese smelter in the annual mating season is usually during negotiations in November and serves as the benchmark for the year ahead.

For 2020, it was set at $62 a tonne and 6.2 cents per lb by China's Jiangxi Copper and Freeport-McMoRan Inc, whose Indonesian unit operates Grasberg, the world's second largest copper mine.

However, spot TCs, which fall when the concentrate market tightens, are now at an eight-year low of $50.50 a tonne.

"Smelters are aiming for a settlement in the low $60s and miners are proposing ... mid $50s," said one source involved in the discussions, declining to be identified.

A second source, working for a miner and also declining to be named, said the two sides were more than $10 apart on charges.

Chile's Antofagasta and Freeport are typically the first to agree charges.

However, a third source involved in the talks said the problem for Freeport is that Grasberg's concentrate will risk exceeding the maximum permitted fluorine content of 1,000 parts per million, or 0.1%, in top copper consumer China.

"Grasberg will produce a lot more but the concentrates come with high fluorine," said the source, adding that the chemical impurity essentially limits destinations for Grasberg's concentrate. "That puts them in a weaker negotiating position."

Freeport did not respond to a request for comment.

"It is a big challenge for Freeport. (It's) hanging over the negotiations," said CRU analyst Hamish Sampson.

Grasberg is moving from open pit to underground mining. Freeport Indonesia Chief Executive Tony Wenas said in June it would produce 160,000 tonnes of ore per day in 2021.

(Reporting by Tom Daly and Zandi Shabalala; additional reporting by Shivani Singh; editing by Pratima Desai and Marguerita Choy)

By Tom Daly and Zandi Shabalala


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
ANTOFAGASTA PLC -2.27% 1504.5 Delayed Quote.4.44%
JIANGXI COPPER COMPANY LIMITED -5.29% 14.32 End-of-day quote.17.57%
TONGLING NONFERROUS METALS GROUP CO.,LTD. -0.79% 2.51 End-of-day quote.-2.33%
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Financials
Sales 2020 91 188 M 14 070 M 14 070 M
Net income 2020 893 M 138 M 138 M
Net Debt 2020 - - -
P/E ratio 2020 29,0x
Yield 2020 0,40%
Capitalization 26 422 M 4 076 M 4 077 M
Capi. / Sales 2020 0,29x
Capi. / Sales 2021 0,29x
Nbr of Employees 15 292
Free-Float 56,4%
Chart TONGLING NONFERROUS METALS GROUP CO.,LTD.
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Tongling Nonferrous Metals Group Co.,Ltd. Technical Analysis Chart | 000630 | CNE000000529 | MarketScreener
Technical analysis trends TONGLING NONFERROUS METALS GROUP CO.,LTD.
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Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 3
Average target price 2,30 CNY
Last Close Price 2,51 CNY
Spread / Highest target -8,37%
Spread / Average Target -8,37%
Spread / Lowest Target -8,37%
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Managers and Directors
NameTitle
Pei Jin Jiang General Manager & Director
Ming Yong Chen Chairman-Supervisory Board
Jun Yang Chairman
Hua Dong Gong Vice Chairman
He Ping Wu Board Secretary & Director
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