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| Freeport McMoRan |
Freeport’s move signals fundamental shift in copper concentrate pricing mechanism
Freeport-McMoRan plans to exit the traditional copper benchmark pricing system, citing the need to preserve smelter profitability amid record-low TC/RCs. The benchmark, used for decades to price copper concentrates, is now under pressure due to global disruptions and aggressive trader activity. Freeport’s decision could reshape how mined copper is traded globally.
Javier Targhetta, Freeport’s Senior VP of Sales and Marketing, stated the company may abandon the benchmark entirely in 2026. Instead, it would pursue individualized supply contracts that better reflect real market dynamics and protect smelting margins. The move comes as benchmark treatment and refining charges (TC/RCs)—key smelter revenues—have plunged, even nearing negative territory.
Collapsing TC/RCs raise viability concerns for global smelting operations
Benchmark TC/RCs represent critical income for smelters, accounting for nearly one-third of total revenues. However, expanding smelting capacity and concentrate shortages have disrupted balance. In 2025, Antofagasta set a record-low benchmark of $21.25/ton treatment and 2.125¢/lb refining charges. This has placed extreme pressure on smelter profitability.
Meanwhile, market participants report spot deals offering TC/RCs below –$100/-10, which would effectively reverse the cost model, adding charges rather than deducting them. Targhetta emphasized that such pricing is “nonsense” and that Freeport’s Atlantic Copper smelter in Spain would not operate under zero tolling fees.
Market shifts toward individualized copper concentrate contracts
As a result, Freeport is increasingly distancing itself from the decades-old benchmark system, signaling a potential industry-wide transformation. According to Targhetta, “The market is evolving away from the benchmark system, now more than ever.” The company already limited its participation in this year’s benchmark negotiations, choosing instead to focus on its own smelting operations.
In contrast to prior years, where Freeport led global benchmark discussions, it now appears content to allow others like Antofagasta to set headline rates, while it negotiates more sustainable, tailored contracts. This shift may encourage other miners to follow suit, potentially fragmenting the benchmark system that has defined copper trading for generations.
ScrapInsight Commentary
Freeport’s departure from benchmark TC/RC pricing reflects deeper instability in the concentrate-to-metal value chain. If smelters cannot secure sustainable processing margins, copper supply could face downstream constraints, especially in high-demand sectors like EVs and infrastructure. Market watchers should anticipate growing divergence in contract structures and potential price volatility in refined copper as legacy pricing frameworks break down.
