Reuters
Japan smelters expect Freeport copper in May-June
Friday April 23, 4:51 am ET
By Robin Paxton
SINGAPORE, April 23 (Reuters) - Japan's major copper smelters expect to receive on schedule their first concentrate shipments this year from the Grasberg mine in Indonesia, following the restart of high-grade mining, smelter officials said on Friday.
The restart this month, announced this week by the mine's owner, U.S.-based Freeport McMoran Copper & Gold Inc (NYSE:FCX - News), would help keep the deliveries on time in May and June, they said.
"(Freeport) has not changed its shipping schedule," an official in the purchasing department of a large Japanese copper smelter told Reuters.
Freeport would ship around 25 percent less copper concentrate to Japan this year than in 2003, smelter officials said. The company declared force majeure on some shipments from Grasberg following a rock slide at the mine in December.
Force majeure is a form of legal protection taken when unforeseen events impede a company's ability to fulfil contracts.
Reduced output from Grasberg, at a time of tight world supply and booming demand, was one factor behind the spike in three-month copper price (MCU3) on the benchmark London Metal Exchange to an 8-1/2-year high of $3,055 a tonne in March.
Copper concentrate is the key raw material for producing copper, which is used in a variety of different applications from plumbing equipment and air conditioners to computer chips and the construction sector.
COPPER CONCENTRATE SHIPMENTS
Pan Pacific Copper Co Ltd, Japan's largest producer of the metal, would receive 123,000 dry metric tonnes of copper concentrate from Grasberg in 2004, Japanese industry officials said.
Pan Pacific is a joint venture between Mitsui Mining and Smelting Co Ltd (Tokyo:5706.T - News) and Nippon Mining Holdings Group (Tokyo:5016.T - News).
Of the imports from Grasberg, Mitsui would take 67,000 tonnes in six shipments and Nippon 56,000 tonnes in five shipments, the officials said.
Both companies were expecting their first deliveries of the year from Grasberg -- 10,000 tonnes each -- in June.
Sumitomo Metal Mining Co Ltd (Tokyo:5713.T - News) would receive 90,000 dry tonnes of copper concentrate in five shipments from Grasberg this year, compared to 120,000 tonnes in calendar 2003, officials said.
They said Sumitomo was scheduled to receive 20,000 tonnes in the middle of May.
Freeport forecast 2004 sales of copper at its Indonesian unit would total 1.0 billion pounds (453,600 tonnes), down from a forecast of 1.4 billion pounds before the rock slide.
The company reported a first-quarter loss of $19.6 million on Tuesday, compared with a profit of $49.2 million a year ago.
Japan's copper production is likely to fall in the six-month period from April to September, hindered by tight raw material supply and falling refining margins, market sources said.
Copper output for the country's seven major smelters was expected to total 519,084 tonnes in the first half of fiscal 2004/05 from 519,521 in the same period a year ago.
LME three-month copper was trading at $2,725/2,735 a tonne by 0757 GMT from $2,705 at close in London on Thursday. The cash price was $107/117 higher than the three-month price, indicating strong demand for the metal. |
