Domestic non-ferrous players like Hindalco and Sterlite Industries are grappling with sluggish spot treatment and refining charges (TC/RC) in their copper divisions, largely due to the surging global deficit in supplies of copper concentrate, the key input. | |
| The global shortage of copper concentrate is estimated at 400,000 tonnes in calendar year 2008 (CY08) so far as compared with a deficit of 200,000 tonnes in CY07, according to analysts. |
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| As a result, spot TC/RC charges for non-ferrous players are currently estimated at 11-12 cents per pound as against 20-22 cents per pound in the March 2007 quarter. |
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| For the domestic players, spot TC/RC typically account for 20-25 per cent of their copper division's earnings. The TC/RC is the rate that miners pay smelters for refining copper concentrate. |
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| Domestic players import copper concentrate from overseas mines and their smelters produce finished products such as copper cathodes. The TC/RC represents the profit margins for these smelters. Senior officials at Hindalco were unavailable for comment. |
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| Meanwhile, officials at Sterlite Industries pointed out that they have long-term contracts in place from their suppliers of copper concentrate and, given strong demand conditions, they expect to minimise the impact of the growing copper concentrate deficit. |
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