Can copper smelters survive shrinking margins?

The intensifying copper concentrate deficit has exerted significant downward pressure on treatment and refining charges (TC/RCs) – the fees paid by mining companies to smelters for processing copper concentrate into refined copper. As supply constraints tighten, smelters face increased competition for available concentrate, leading to a substantial decline in TC/RCs.

The market has experienced a dramatic shift from a projected surplus to a deficit of approximately 274 kt in 2024, increasing to 1,113 kt in 2025. This supply shortfall has triggered a sharp decline in TC/RCs on the spot market at the start of 2024. Since April 2024, the current spot for the TC has remained around -10$/ t, with some reports of positive TC/RCs so far in August, though the contract market has remained relatively quiet, with many smelters opting for extended maintenance.