Chinese smelters to process Antofagasta's copper for free amid supply shortage

From Yahoo Finance: 2025-06-27 01:20:00

Chinese smelters have agreed to process copper from Antofagasta for free, a record low. The deal comes amid a shortage of copper concentrate supply, essential for clean energy production. The zero processing fee is a win for smelters, as spot charges are negative. However, the industry faces potential production cuts due to the revenue loss.

Antofagasta set copper concentrate processing fees at $0 per metric ton, with no charge per pound, benefiting Chinese smelters. The deal reflects a growing demand for copper in clean energy production, particularly for electric vehicles and power lines. The shortage of supply has led to a record low processing fee, impacting the industry’s revenue.

Ivanhoe Mines cut its output guidance due to seismic activity affecting its copper mine in the Democratic Republic of Congo. Global supply deficit for copper concentrate is expected to reach 1.1 million tons in 2025 and 2.6 million tons in 2026. The industry is facing challenges with new smelter capacity and slower supply growth.

Despite the record low processing fee, Chinese smelters have not significantly reduced output. Revenue from byproducts like gold and silver partially offsets the loss from copper. Refined copper output in China reached a record high from January to May, with forecasts predicting a 12% increase in total output for 2025. The industry is adapting to the changing market conditions.



Read more at Yahoo Finance: China’s copper smelters win better-than-expected $0 processing fee from Antofagasta, sources say