BEIJING – Freeport-McMoRan has agreed copper treatment and refining charges (TC/RCs) for 2021 with four Chinese smelters at 4% below this year's terms, an executive from the miner said, signalling a sixth straight drop in the annual benchmark.

Freeport agreed charges of $59.50 a tonne and 5.95 cents a pound with China Copper, Jiangxi Copper, Tongling Nonferrous and Jinchuan Group, Javier Targhetta, senior vice president for marketing and sales and president of its subsidiary Atlantic Copper, said on Monday.

The charges, paid by miners to smelters to process copper ore into refined metal, are weaker than the 2020 benchmark of $62 a tonne and 6.2 cents a pound - also set by Freeport - amid tight concentrate supply and rising demand for feedstock in China, the world's biggest copper consumer.

The first miner-smelter copper TC/RC settlement of the mating season usually serves as the benchmark for the year ahead and is referenced in supply contracts worldwide.

Freeport's settlement with the Chinese smelters, which came later than normal as the coronavirus ruled out annual face-to-face negotiations in Shanghai in November, signals the lowest benchmark since a settlement of $56 a tonne and 5.6 cents per lb for 2011. The benchmark has fallen every year since 2016.

A Chinese smelter source, who declined to be identified as he was not authorised to speak to the media, said the result was "better than expected," however, given where spot treatment charges are at the moment.

"It is not good for smelters if (the low rate) drags on for a long time. Miners are still in too strong a position."

Spot treatment charges in China, as assessed by Asian Metal, are languishing at $50.50 a tonne, their lowest level in eight years.

Jiangxi Copper confirmed the settlement on Tuesday.

"Under the impact of tight supply of copper concentrate from mines and the expansion of domestic smelting capacity in recent years, TC/RCs have been decreasing year after year," it said in an email.

China Copper, Jinchuan and Tongling Nonferrous did not immediately respond to requests for comment.