Japan’s output of rolled copper products rose 2.4% in May from April as strong demand for environmentally friendly air conditioners offset weakness in chips and cars.

The Japan Copper and Brass Association said that rolled copper output totalled 72,328 tonnes in May on a seasonally adjusted basis nearly flat from a year earlier.

An industry official said that output has been almost flat on a year-on-year basis since March, meaning the magnitude 9.0 earthquake during the month has not had a big impact on Japan’s rolled copper output. But it is clear that air conditioner makers are ramping up output ahead of the peak demand season which helped offset soft demand from the semiconductor and auto sectors.

Demand for copper, used in a wide range of items including construction materials, computer chips and car parts is often seen as a measure of economic activity.

The Japan Electric Wire and Cable Makers’ Association said last week that cable copper wire and cable shipments in May inched up from a year earlier to 51,200 tonnes. That was the first YoY rise in three months but the third lowest level for the month of May in 35 years as exports declined in the wake of a slowdown in the Chinese economy.

Japanese manufacturers have been recovering from the effects of the March 11 earthquake and tsunami, making progress in restoring production and supply chains wrecked by the disaster.

The government last week upgraded its view of the economy’s performance and outlook for the first time in 4 months following the previous week’s upgrade in the Bank of Japan’s view of the economy. But a slowdown of the global economy, particularly China, the world’s biggest consumer of copper and Japan’s biggest export market is a worrying sign.

Brazil and China are heading for a battle of strategic necessity over copper in Africa that will leave the winner walking away with the most expensive acquisition of a diversified minerals company.

Jinchuan Group, the biggest Chinese nickel producer, is considering a bid for Johannesburg-based Metorex Ltd. (MTX) to rival Vale SA (VALE5)’s offer, two people familiar with the deal said yesterday. Metorex is trading 6.1 percent above Rio de Janeiro- based Vale’s proposal of 7.35 rand a share, the most of any pending deal in Africa, making it the likeliest to garner a higher price tag, according to data compiled by Bloomberg. (more…)

It is said from a Chinese smelter source on Thursday that Chinese copper smelters are willing to accept the same treatment and refining charges for 2010 that Freeport-McMoRan Copper & Gold Inc agreed with Japanese smelters.

A Japanese smelter source confirmed the deal with Freeport at 38 percent below 2009 levels, but added that talks were still ongoing with BHP Billiton, which he said was demanding even lower fees for smelting concentrate.

An official at Pan Pacific, one of Japan’s leading copper smelters, confirmed that a deal had been signed with Freeport, although declined to give any further details.

Freeport-McMoRan has agreed 2010 fees to convert copper concentrate into finished metal of $46.50 a tonne and 4.65 cents a pound with Japanese smelters, a 38 percent cut from this year’s fees.

“We consider this a benchmark and will try to see that the same fee is applied to all other TC/RCs for 2010,” the Japanese smelter source said.

Chinese smelters had sought to settle the treatment and refining charges at $60 a tonne to convert concentrate into copper anode and 6 cents a pound to refine anode into cathode, but an excess of smelter capacity versus concentrates has left the industry accepting lower fees to secure feedstock.

“We have to accept it, based on the market conditions,” said the Chinese smelter source, who declined to be identified as he was not authorised to speak to the media.

Treatment and refining charges are fees paid by miner to smelters to convert imported concentrates into refined copper, and are deducted from the sale prices, based on London Metal Exchange copper prices.

It was said from Jiangxi Copper chief negotiator on Thursday that China’s Jiangxi Copper Co. is still in talks with BHP Billiton Ltd. and Freeport McMoran Copper & Gold Inc.  on annual fees for 2010 to smelter the raw material into refined metal.

“This is a big decision… we’ll have to think about it carefully,” the official, who didn’t want to be named, said, after Tongling Nonferrous Metals Group’s chief negotiator said the company has settled 2010 copper TC/RCs with Freeport at $46.50 a metric ton and 4.65 cents a pound, down 38% from this year.

The fees, also known as treatment and refining charges or TC/RCs, represent the profit margin of copper smelters.

In times of tight concentrate supply, smelters are forced to lower these charges to ensure sufficient raw material availability to keep smelters running.

It is said from the chief negotiator for Tongling Nonferrous Metals Group Wednesday that Chinese copper smelters will agree to a settlement price on 2010 copper treatment and refining charges with U.S.-based Freeport McMoRan Copper & Gold Inc. (FCX) at $46.50 a metric ton and 4.65 cents a pound.

“China will accept the TC/RCs that were settled between Japanese smelters and Freeport,” said Yang Jun, who also leads the China Smelters Purchase Team.

He said that so far, the deal is with Freeport.

The settlement is roughly midway between $50/ton and 5 cents/lb that the smelters had sought and $43/ton and 4.3 cents/lb that miners wanted.

It is showed from the General Administration of Customs on Tuesday that China imported 194,388 metric tons of refined copper in November, up 37% compared with the same month last year.

Imports were up 15% from 169,374 tons in October.

In the January-November period, imports surged 137% on year to 2.94 million tons, customs data showed.

It is reported from the Xinhua News Agency over the weekend that Jiangxi Copper Co. has started a project to increase the copper concentrate output from its Jiujiang mine.

The project, scheduled to be completed by 2010, aims to raise annual concentrate output to 14,800 metric tons from the current 6,000 tons, according to the report.

The Jiujiang mine is rich in copper and sulfur, with around 1.65 million tons of copper mine reserves.

It is reported from 21st Century Business that Copper processing fee talks between Chinese smelter operators and overseas miners are stalled amid diverging price expectations.

Overseas miners insisted on $43 a metric ton to have ore smelted whereas Chinese producers asked for $60, the Chinese language newspaper said, citing Jiangxi Chief Financial Officer Gan Chengjiu. Chinese smelters need a fee of $66 to break even, 21st Century cited Gan as saying.

Jiangxi is leading a team of Chinese smelter operators in talks with miners including BHP Billiton Ltd. for annual fees for next year, it said.