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| Copper |
Copper price rally near record levels is accelerating as Chinese smelter activity reaches historic highs. Copper futures climbed above $6.11 per pound in New York. As a result, the market approaches its all-time peak recorded earlier this year. The rebound reflects tightening supply dynamics and recovering downstream demand.
Copper price rally near record conditions are supported by a sharp recovery in global smelting utilization. Satellite data shows inactive global capacity fell to 11.7% in March. Meanwhile, China reduced idle capacity to just 3.9%. Consequently, active smelting capacity reached a record 10.73 million tonnes. This expansion signals strong refining throughput and improved industrial consumption.
Chinese Smelter Expansion Tightens Concentrate Market
Chinese smelters are driving the copper price rally near record through aggressive concentrate procurement. The country continues expanding smelting capacity despite tight raw material supply. Meanwhile, sulfuric acid prices surged to $210 per tonne FOB China. Therefore, smelters offset margin pressure through by-product credits.
Spot treatment and refining charges (TC/RCs) have collapsed into negative territory. Recent settled near –$78.50 per tonne and –7.85 cents per pound. In contrast, TC/RCs stood at positive $50 per tonne in early 2024. This shift indicates severe concentrate scarcity and stronger smelter competition.
Supply Disruptions and Policy Risks Amplify Price Momentum
Global supply constraints reinforce the copper price rally near record trajectory. Indonesia’s Batu Hijau export permit expiry threatens concentrate flows. Additionally, the Kamoa-Kakula smelter in the Democratic Republic of Congo is consuming domestic supply. As a result, seaborne concentrate availability continues to decline.
Meanwhile, outages in Iran and Australia have reduced regional smelting output. North America also reported elevated idle capacity at 32.3%. However, Europe maintains relatively stable operations with lower inactivity levels. Therefore, regional imbalances persist across the global refining landscape.
The annual benchmark TC/RC settlement underscores tightening fundamentals. Antofagasta agreed to zero-dollar TC/RC terms with Chinese smelters for 2026. This marks the lowest level ever recorded. Consequently, miners face margin compression while smelters secure feedstock through aggressive pricing.
ScrapInsight Commentary
Copper price strength will likely persist as concentrate scarcity deepens and smelter capacity expands. However, sustained negative TC/RCs may force production discipline among refiners. Long term, scrap copper flows will gain strategic importance in balancing refined supply deficits.
