Since the beginning of this year, the spot treatment charge market for copper concentrates has shown an unprecedented and severe downward trend. The SMM Copper Concentrate Spot Index has fallen from -45 USD/dmt at the start of the year to near -70 USD/dmt, with the speed and magnitude of the decline being historically rare. A negative treatment charge means that when smelters purchase copper concentrates, they not only fail to receive traditional processing income from miners but instead must pay the sellers. Based on the current TC of -70 USD/dmt, the actual cost smelters pay sellers in the copper smelting process is equivalent to a TC of 70 USD, or further converted to a TC+RC of approximately 112 USD. This extreme price signal has quickly drawn high market attention to smelter profitability and even sparked concerns about the sustainability of domestic copper smelting production. Despite treatment charges falling to historic lows, copper cathode production by Chinese smelters remains at high levels, currently around 1.2 million tons per month. This phenomenon of "producing more while losing more" appears, on the surface, to contradict market logic, but actually reflects smelters' passive choices and structural supporting factors in the current complex environment. Historically, extreme treatment charge scenarios are not unprecedented. In past industry downturns, smelters often relied on one or several factors—exchange rate fluctuations, rising sulfuric acid prices, or treatment charges themselves—to barely maintain cash flow balance. In the current cycle, the sharp rise in sulfuric acid prices has become a key variable supporting smelter survival. Currently, the ex-factory prices of smelter acid sold by domestic copper smelters generally range from 800 to 1,600 yuan per ton. The latest SMM Copper Smelting Acid Index stands at 1,235.5 yuan/ton. As a crucial byproduct of copper smelting, sulfuric acid price fluctuations significantly impact smelters' comprehensive earnings. Typically, smelters produce approximately one ton of sulfuric acid for every dry metric ton of copper concentrate processed. Based on the current sulfuric acid price of 1,235.5 yuan/ton, after deducting value-added tax (at a 13% rate) and converting to US dollars (using an exchange rate of 6.9), each ton of sulfuric acid can contribute about 158 USD in revenue for the smelter, equivalent to an additional 158 USD per dry metric ton of copper concentrate. If further converted to the TC+RC metric, this amounts to about 99 USD. Thus, the rise in sulfuric acid prices has significantly offset the loss pressure from negative copper concentrate treatment charges, with some more efficient smelters even achieving marginal profitability. It is precisely this "stabilizer" role of sulfuric acid that allows smelters to maintain high operating rates under extreme treatment charge conditions. However, the support of sulfuric acid for smelting profits is not unlimited, as its price trend is itself influenced by more complex international geopolitical factors. The recent sharp escalation of the Middle East situation has brought significant uncertainty to the global sulfuric acid and sulfur supply chain. Since the joint US-Israeli military strike against Iran on February 28, 2026, the Strait of Hormuz, the world's most critical energy transport route, has rapidly fallen into a severe transit crisis. After taking office, Iran's new Supreme Leader, Mojtaba Khamenei, immediately declared that the strait would remain closed as a strategic lever against the US-Israeli alliance and suggested that neighboring countries close US military bases. The Islamic Revolutionary Guard Corps subsequently explicitly announced a ban on any vessels associated with the US or Israel from passing through the Strait of Hormuz, warning of severe consequences for unauthorized passage. The Strait of Hormuz is a critical chokepoint for global sulfur transport. Statistics show that before the conflict, over 100 ships passed through the strait daily. However, after the conflict erupted, transit traffic plummeted by over 90%, with extreme cases of no ships passing for an entire day, leaving over 3,000 vessels stranded in nearby waters. This effective blockade has not only directly impacted the crude oil market—with Brent crude futures rising over 50% within a month to exceed 114 USD per barrel—but has also severely disrupted the global supply chain for sulfur and sulfuric acid. War risks have caused shipping insurance costs to soar to over 20% of the cargo value, further increasing logistics costs and plunging global sulfur supply into a logistical crisis. Although Iran claims to allow passage for vessels from "non-hostile" countries, requiring them to obtain prior permission, actual transit volumes remain extremely low, far below global trade demand. Simultaneously, the Houthi armed group in Yemen has announced its involvement, posing new security threats to the Red Sea-Suez route. The compounding pressure on the two major shipping chokepoints of the Strait of Hormuz and the Red Sea is posing a systemic challenge to the global supply chains for energy and chemical raw materials. As the primary raw material for sulfuric acid production, the disruption in sulfur supply directly drives international and domestic sulfuric acid prices progressively higher. Given the current situation, geopolitical conflicts show no signs of easing in the short term, implying further room for sulfuric acid price increases. The continued rise in sulfuric acid prices will have a dual impact on the domestic copper smelting industry. On the one hand, increased sulfuric acid revenue will continue to provide crucial profit supplementation for smelters, enabling them to maintain production even at lower TC levels and potentially further depressing spot copper concentrate treatment charges. On the other hand, this surge in sulfuric acid prices, driven by geopolitical conflict, also makes smelter profitability highly dependent on external unstable factors, rendering the industry's overall risk resilience increasingly fragile. Notably, the extreme treatment charge environment has begun to have a tangible impact on the global layout of copper smelting capacity. Mitsubishi Materials of Japan recently announced its plan to cease operations at its Onahama copper smelter by the end of March 2027. The smelter has a crude and refined capacity of 230,000 tons, and the main reason for the closure is precisely the intensified competition in the global copper smelting industry, leading to a sharp deterioration in copper concentrate TC/RC and persistent pressure on business prospects. This decision sends a clear signal: against the backdrop of continuously bottoming treatment charges and industry profits highly dependent on byproducts and external environments, some high-cost smelting capacity or those lacking comprehensive recovery capabilities are facing pressure to exit the market. In summary, China's copper smelting industry is currently at a highly unusual cyclical juncture. On one hand, smelters, benefiting from high sulfuric acid prices, have temporarily weathered the impact of negative treatment charges, maintaining high output. On the other hand, sulfuric acid prices themselves are heavily dependent on geopolitical situations, and external variables like the Strait of Hormuz blockade introduce significant uncertainty into the sustainability of smelting profits. If tensions in the Middle East persist, sulfuric acid prices may continue to rise, leaving room for TC to fall further, potentially enhancing smelters' tolerance for extreme treatment charges in phases. However, if geopolitical tensions ease, sulfur supply chains recover, and sulfuric acid prices retreat from their highs, smelters would face the risk of a "double blow" from both low treatment charges and reduced byproduct revenue, potentially heralding a genuine phase of capacity reduction and deep adjustment for the industry. Therefore, the current apparent "resilience" of the copper smelting industry is essentially built upon a fragile balance between geopolitical factors and the byproduct market. For market participants, besides monitoring TC trends, it is crucial to closely track changes in sulfuric acid prices and the underlying geopolitical factors to make more accurate judgments regarding the production sustainability and profitability prospects of the smelting industry.

This week, the macro market still repeatedly traded around the Middle East situation and expectations for the US Fed. At the beginning of the week, tensions among the US, Israel, and Iran eased slightly, the US dollar pulled back, and risk appetite recovered temporarily, allowing copper prices to stop falling and rebound at one point. However, Iran later denied progress in the relevant negotiations, geopolitical tensions tightened again, international oil prices rose sharply, and market concerns over supply disruptions in the Strait of Hormuz resurfaced, with safe-haven sentiment rebounding accordingly and weighing on copper prices. Market bets on major central banks cutting interest rates this year were pushed back significantly, and expectations for macro liquidity weakened at the margin. Overall, this week’s copper price logic still centered on the repeated tug-of-war among geopolitical risks, oil prices, the US dollar, and interest rate cut expectations. Before macro uncertainty eases materially, copper prices will likely remain in the doldrums with rangebound fluctuations in the short term. Fundamentally, the logic of ore supply tightness continued. On March 25, Mitsubishi Materials announced that it will cease part of the copper concentrates processing business at the Onahama smelter in 2027, and explicitly mentioned the sharp deterioration in TC/RCs and pressure on smelting profits, further confirming the current reality of tight copper concentrates supply and continued damage to profitability on the smelting side. Global exchange copper inventories remained high, but demand in China had already started, and the pace of destocking in China’s social inventory exceeded market expectations. Supported by the opening of the import window and domestic demand, inventories outside China showed signs of flowing back into China. Looking ahead to next week, the macro theme is expected to remain largely unchanged. If the Middle East situation does not ease substantially, elevated oil prices and a relatively strong US dollar will likely continue to weigh on copper prices, and short-term resistance will remain; however, ore supply tightness, worsening smelting profits, and domestic demand will still provide some support for copper prices. Therefore, copper prices are expected to continue to fluctuate rangebound within a narrow range next week, with LME copper expected at $12,000-12,500/mt and SHFE copper expected at 93,000-96,500 yuan/mt. In the spot market, as imported cargoes arrive one after another, the pace of domestic inventory destocking may slow down. Although inventories are still being drawn down, spot premiums are expected to find it difficult to rise sharply due to the relatively high inventory base. Spot prices against the SHFE copper front-month contract are expected at a discount of 120 yuan/mt to a discount of 20 yuan/mt.

Mitsubishi Materials Corporation said on Wednesday that it had decided to cease the processing of copper concentrates at the Onahama smelter and refinery, as well as the operation of related smelting facilities, by the end of March 2027.In a statement, the company said the outlook for the related business had become increasingly uncertain due to intensifying competition from overseas smelters and a sharp decline in treatment and refining charges (TC/RCs) for copper concentrates.The company said in a statement that it expected to record an impairment loss of 21 billion yen in Q4 of the current fiscal year ending this month, mainly related to the smelter's fixed assets.

On March 13, 2026, China's copper smelting industry set a new historical record. According to SMM data, the imported copper concentrate index closed at -60.39 USD/dmt, officially breaking through the -60 USD level.

On June 12th, Bloomberg reported that Teck Resources and Sumitomo Metal Mining are locked in a dispute over treatment and refining charges (TC/RCs) in a major copper concentrate supply agreement. The disagreement, centered on shipments from Teck’s Quebrada Blanca and Highland Valley mines, has prompted the appointment of lawyers to select an industry expert as an independent referee. The clash highlights cracks in the traditional benchmark pricing system, after Antofagasta’s 2025 deal with Chinese smelters set TC/RCs at $21.25/2.125 cents, far below historical norms. Some Japanese buyers, including Sumitomo, have resisted adopting this benchmark amid sharply falling spot TC/RCs, which have recently turned negative. The situation underscores growing tension between well-funded Chinese smelters and financially pressured Western peers, with some smelters in the Philippines and Namibia already suspending operations.

According to foreign media reports, global copper mining giant Antofagasta has initiated mid-year negotiations with smelters in China and Japan. Sources revealed that due to tight copper concentrate supply, smelters may request a "US$0" treatment charge (TC/RCs) for the second half of 2025. This unprecedented offer represents a 100% plunge from the 2024 benchmark price of US$80 per metric ton (mt) and could potentially turn negative. The sharp decline in copper concentrate TCs stems from the shutdown of First Quantum's Cobre Panama copper mine and a surge in China's smelting capacity, leading to a supply-demand imbalance. On May 16, the spot copper concentrate TC fell to a historic low of negative US$59.1/mt. Analysts believe that if the zero-TC scenario materializes, small and medium-sized smelters will face a survival crisis, while miners' bargaining power will further strengthen.

On April 25, Sinomine Resource Group released its Q1 2025 performance report. According to the announcement, the company achieved a total revenue of 1.536 billion yuan, up 36.37% YoY. Net profit attributable to shareholders of the publicly listed firm was 135 million yuan, down 47.38% YoY. Sinomine Resource Group stated that in Q1 2025, the company achieved sales of 8,964.43 mt of lithium chemical products, up 13% YoY. However, due to market fluctuations in the lithium battery and new energy sector, the selling price of lithium chemical products declined significantly YoY, leading to a decrease in the gross profit margin of the company's lithium battery and new energy business. Facing downward pressure in the industry, the company actively implemented various cost-reduction and efficiency-enhancement measures to mitigate the risks of market price fluctuations. In Q1 2025, the company's rare light metal (cesium, rubidium) business maintained a good growth momentum, generating a total operating revenue of 345 million yuan during the reporting period, up 94% YoY, and achieving a gross profit of 231 million yuan, up 92% YoY. Among them, the fine chemical business of cesium and rubidium salts achieved sales of 265 dmt of cesium salt products, up 78% YoY. As a leading enterprise in the global cesium and rubidium salt market, the company continues to consolidate its dominant position in the global cesium salt market by leveraging the resource advantages of the Tanco mine in Canada and the Bikita mine in Zimbabwe. Meanwhile, it should be noted that in Q1 2025, the company's copper smelting business at the Tsumeb smelter in Namibia incurred a net profit loss of 100.4 million yuan due to a significant decline in industry processing fees (TC/RC) caused by tight global copper concentrate supply. This had a phased impact on the company's performance during the reporting period. The company has formulated relevant cost-reduction and efficiency-enhancement measures to gradually reduce losses in the copper smelting business and will form new profit growth points as soon as possible by releasing the capacity of the germanium business. It strives to achieve a turnaround for the Tsumeb subsidiary in Namibia at the earliest opportunity. During an investor activity survey, the company mentioned that in 2024, its self-owned mines achieved sales of 39,477 mt of lithium chemicals, up 164% YoY. The company fully leveraged its resource advantages, adjusted the raw material supply structure, and increased the proportion of spodumene concentrates, thereby reducing the production cost of lithium chemicals. Despite significant fluctuations in the market price of lithium chemical products in 2024, the company effectively mitigated market risks and smoothly navigated the industry cycle through business strategies and cost-reduction measures such as significantly increasing the self-sufficiency rate of lithium ore, adjusting the raw material supply structure, expanding municipal power supply capacity, and constructing PV power plants. In the future, the company plans to invest in and construct a 30,000 mt/year lithium sulfate plant in Zimbabwe, which is expected to further reduce transportation costs and thus lower the production cost of lithium chemicals. Regarding the future development outlook of the lithium battery business, Sinomine Resource Group stated that in the lithium battery and new energy business, the company will maintain the comprehensive cost of lithium chemicals at a leading level in the industry. It aims to complete the layout of a 30,000 mt/year lithium sulfate production capacity in Africa by 2026. It is worth mentioning that on April 25, Sinomine Resource Group also issued a feasibility announcement regarding the company's engagement in commodity futures and options hedging business. The announcement mentioned that the company is primarily engaged in the development and utilization of new energy raw materials for lithium batteries, with its main products being lithium chemicals such as lithium hydroxide and lithium carbonate. In recent years, the selling prices of the company's lithium chemical products have been significantly influenced by market price fluctuations. To mitigate the operational risks posed by product price fluctuations, the company intends to utilize the hedging functions of financial instruments to conduct commodity futures and options hedging business on product risk exposures related to its production and operation activities, effectively reducing the risks associated with market price fluctuations of products and ensuring the stable and sustainable development of its main business. The significant price fluctuations of lithium carbonate and lithium hydroxide are also reflected in their spot prices. According to SMM spot quotes, taking battery-grade lithium hydroxide as an example, its price dropped from a high of 560,000 yuan/mt in November 2022 to 67,360 yuan/mt on May 6, representing a decline of 87.97%. For battery-grade lithium carbonate, the price fell from a high of 567,500 yuan/mt in 2022 to 66,650 yuan/mt on May 7, marking a decline of 88.26%. 》Click to view SMM spot quotes for new energy products The combined amount of margins and premiums for Sinomine Resource Group and its subsidiaries to engage in commodity futures and options hedging business shall not exceed 200 million yuan. The aforementioned limit can be utilized on a rolling basis within the validity period. The varieties of commodity futures and options hedging business are limited to those directly related to the company's production and operation, specifically lithium chemical futures and options. The company stated that engaging in commodity futures and options hedging business aims to hedge against risks such as product price fluctuations, thereby achieving stable operation, which is necessary. The company has established clear regulations on the limits, varieties, and specific implementation of the hedging business, and the targeted risk control measures adopted are feasible. By conducting commodity futures and options hedging business, the company can achieve asset preservation for the purpose of risk hedging, enhance the financial stability of the company, and meet the requirements for stable operation. Therefore, the company's engagement in commodity futures and options hedging business is both necessary and feasible.

On Thursday, April 10, Felipe Williams, head of the metals business at India's Adani Enterprises Ltd., stated that the company is ready to commission a smelter within the next four weeks, which will process copper concentrates. Speaking at a conference in Santiago, he said, "In the next four weeks, we will commission the world's largest smelter for copper and other metals." He mentioned that the smelter, named Kutch Copper, will begin smelting in the coming weeks as part of the first phase, and the company has already received environmental approvals to increase its capacity. Williams noted that the smelter began trial operations a month ago, producing its first batch of copper anode. As India strives to meet the demands of its industrial and energy transition, the country's copper demand is expected to grow significantly in the coming years. Williams said, "The smelter faces significant challenges because the current treatment and refining charges (TC/RCs) are unfavorable." "We had hoped to commission in a completely different environment, but we need to face reality; this is a long-term opportunity." For more updates on the copper industry chain, you are welcome to attend the CCIE 2025 SMM (20th) Copper Conference & Expo, hosted by SMM, which will be held in Nanchang, Jiangxi, from April 22-25, 2025. CCIE 2025 SMM (20th) Copper Conference & Expo ~ Over 3,000 industry elites, representatives from upstream and downstream enterprises in the copper industry chain, government officials, industry associations, third-party equipment, logistics and warehousing, and academic experts will gather together. The conference covers mines, smelting, copper processing, trade, recycling, and end-use applications, encompassing the entire copper industry chain. At the event, more than 100 exhibitors will showcase the latest copper processing and smelting equipment, high-quality raw material suppliers, and new-type copper-based materials, highlighting the innovation and vitality of the copper industry. The conference features a variety of exciting activities: the main forum focuses on global copper market trends, raw material supply, policy impacts, and market outlook. Sub-forums delve into specific areas such as electrical power transmission and distribution, secondary copper, copper-based new materials, hardware and plumbing, and ESS, exploring industry hot topics. During the conference, there will also be a two-day field trip to visit 12 representative enterprises in the copper industry with a cumulative capacity of 1 million mt, sharing cutting-edge technologies and valuable experiences to upgrade the copper industry chain and promote high-quality industry development. CCIE 2025 SMM (20th) Copper Conference & Expo Helps you grasp industry trends, expand your network, and seek business opportunities! SMM cordially invites you to join us in Nanchang, Jiangxi, from April 22-25, to gather in the new era of copper and jointly plan for new development!

On Tuesday, April 1, London copper prices rose as optimistic demand prospects outweighed concerns that the US implementation of reciprocal tariffs could trigger a global trade conflict. At 11:06 Beijing time, the three-month copper contract on the London Metal Exchange (LME) increased by 0.57% to $9,765 per mt. The Caixin China Manufacturing Purchasing Managers' Index (PMI) for March, released on April 1, recorded 51.2, up 0.4 percentage points from February, reaching a new high since December 2024, indicating that manufacturing production and business activities continued to expand at a faster pace. A base metal trader said, "Everyone is closely watching the tariff policy that the US will announce tomorrow. The approaching uncertainty has led to a risk-off sentiment." Copper prices were also supported by a supply deficit of copper concentrates, which has driven the treatment and refining charges (TC/RCs) for copper concentrates into negative territory. The decline in TC/RCs indicates that supply is tight. Meanwhile, the tin futures price on the Shanghai Futures Exchange (SHFE) performed well, rising 0.4% to 287,290 yuan per mt, as the market worried that the earthquake in Myanmar, a tin-rich country, last Friday would lead to supply disruptions. Other LME metals: the three-month aluminum contract rose 0.32% to $2,541 per mt; the three-month lead contract increased 0.25% to $2,017 per mt; the three-month zinc contract climbed 0.54% to $2,868 per mt; the three-month tin contract fell 0.34% to $36,520 per mt; and the three-month nickel contract surged 1.39% to $16,140 per mt. Shanghai metals: the most-traded SHFE copper contract dropped 0.24% to 80,130 yuan per mt; SHFE aluminum rose 0.07% to 20,550 yuan per mt; SHFE zinc increased 0.36% to 23,600 yuan per mt; SHFE lead climbed 0.09% to 17,425 yuan per mt; and SHFE nickel fell 0.48% to 129,900 yuan per mt.

SMM reported that the CSPT team held a general manager's office meeting for the first quarter of 2025 in Shanghai on the morning of March 31, and decide not to set a second quarter copper concentrate spot purchase guidance TC/RC.