Freeport McMoRan (NYSE:FCX) has agreed with Chinese smelters for treatment and refining charges of $88/metric ton and $0.088/lb for copper concentrate supply in 2023, Reuters reported Friday.
The charges, paid by miners to smelters to process ore into refined metal, are the highest since 2017 and 35% higher than the 2022 benchmark, due to an expected surplus of copper concentrate approaching 300K tons, according to the report.
This year’s benchmark was set at $65/ton and $0.065/lb, but China’s top copper smelters had already lifted their floor TC/RCs in Q4 to a five-year high at $93/$0.093 because of the supply glut.
Market participants generally have expected a treatment charges benchmark of $80-$90/ton, pointing to Teck Resources’ Quebrada Blanca Phase 2 project in Chile and Anglo American’s Quellaveco project in Peru that would contribute to the rising supply of concentrate.
“Based on forward guidance estimates, Freeport should continue to drive slower growth profit over the next few years, suggesting one should add this company to an investment portfolio,” Quant Labs Research writes in an analysis posted recently on Seeking Alpha.