LMEWEEK-UPDATE1-Copper smelting fees to stay low-Atlantic Copper

* No marked change in tight concentrates market

* Smelting over-capacity remains in place

* Rise in spot TC/RCs temporary

(Adds detail)

LONDON, Oct 12 (BestGrowthStock) – Atlantic Copper (FCX.N: ) sees no
fundamental change in the tight copper concentrates market and
expects smelting fees to remain low overall, Javier Targhetta,
president of the Spanish-based smelter told Reuters on Tuesday.

“I don’t see any big change in concentrate tightness,” said
Targhetta, adding smelting fees will remain under pressure as a
result.

Annual negotiations begin in London this week between
smelters and miners for copper treatment and refining charges
(TC/RCs), which smelters hope will recover from what are thought
to have been historic lows in the mid-year. [ID:nSGE66R00Z]

But according to Targhetta, a significant price recovery is
unlikely as the amount of refined copper smelters can process
still far outstrips the amount of copper concentrates miners can
produce.

TC/RCs are the fees paid by miners to smelters to convert
concentrates into refined copper.

The gulf between miners’ bargaining power over that of
smelters is so severe that fees have, according to some industry
experts, fallen below both break-even and marginal production
costs, forcing smelter closures like those in Japan.
ID:nTOE68P070]

More recently, however, the possible closure of Sterlite
Industries’ (STRL.BO: ) large smelter in India has helped spot
TC/RCs triple over the past two months, and boosted smelters’
hopes for better term contracts for 2011.

“Short term, smelter breakdowns like the one in India have
an influence on spot fees,” said Targhetta, but he maintained
that the overall downtrend in term fees for annual or half year
contracts is largely still in place.

Atlantic Copper is part of U.S.-based Freeport-McMoRan
Copper & Gold (FCX.N: ).
(Reporting by Maytaal Angel; editing by Anthony Barker)

LMEWEEK-UPDATE1-Copper smelting fees to stay low-Atlantic Copper