Copper smelter. (Stock Image)
A Chinese smelter and Antofagasta Plc agreed to set fees for processing copper concentrate at a record low for 2026, after tough negotiations that reflected a market facing abundant refining capacity but tight global ore supplies.
The smelter and the miner set treatment and refining charges — a discount to London Metal Exchange prices paid to smelters for processing concentrates into refined copper — at zero dollars a ton and zero cents a pound, according to people familiar with the matter, who asked not to be identified as talks were private.
Talks are typically led by one smelter representing a group of them. The people did not name the Chinese smelter. The agreement typically acts as a template for others, and compares with $21.25 a ton and 2.125 cents a pound for 2025. Shanghai Metals Market reported the deal earlier Saturday.
The global copper market has come under strain this year as a number of trends coincided. A massive expansion of smelting capacity led by China has weakened processors’ bargaining power, while a slew of disruptions at top mines from Indonesia to Chile this year has tightened the concentrate market.
At the same time, US import-tariff concerns have seen record volumes of refined metal drawn into US stockpiles, crimping availability elsewhere. Copper futures on the LME rallied to a record in December.
That combination has spurred expectations for a further slump in processing fees and, potentially, a breakdown of the industry’s benchmark pricing system. With the charges slumping, some smelters and even miners have started to walk away, fracturing the decades-old practice.
Shifts in so-called TC/RCs have big implications for smelters’ margins. The fees typically account for about one-third of their incomes, according to Wood Mackenzie Ltd.
Spokespeople at top Chinese smelters Jiangxi Copper Co and Tongling Nonferrous Metals Group declined to comment. Calls to Antofagasta outside of business hours went unanswered.