TRADE REVIEW: Rising China smelter demand to keep Q3 copper TC/RCs under pressure

This report is part of the S&P Global Energy's Metals Trade Review series, where we dig through datasets and digest some of the key trends in iron ore, metallurgical coal, copper, alumina, cobalt, lithium, nickel and steel and scrap. We also explore what the next few months could bring, from supply and demand shifts to new arbitrages, and to quality spread fluctuations.

China's clean copper concentrate treatment charge and refining charges are expected to remain under pressure in the third quarter of 2026, as tight supply struggles to meet rising demand from new smelting capacity in China, according to traders, producers, and smelters.

Several new smelting projects are expected to boost demand in the fourth quarter of 2026 and beyond.

Inner Mongolia-based Chifeng Jintong's new 300,000 metric tons/year line is also expected to start in Q4.

Liaoning-based Yingkou C&D Shenghai Non-ferrous plans to start up a new 300,000 mt/y smelter in early October.

Shandong Humon is set to commission a new 200,000 mt/y line in Q4 .

TC/RCs fell sharply in Q2 , driven by prevailing supply shortages, strong demand from ex-China smelters and elevated sulfuric acid prices, which improved smelter by-product profit and enabled the acceptance of lower TC/RCs.

In Q3 , the market expects TC/RCs to remain low as supply tightness persists, though this could be partially offset by smelters' negative margins and potential production cuts.

Platts, part of S&P Global Energy, assessed the CIF China clean copper concentrate treatment charge and refining charge at minus $132/mt and minus $13.2 cents/lb, respectively, on July 9, which is the record low.

Smelters turn to alternatives as concentrate tightness persists

In response to tight supply and low TC/RCs, smelters have increasingly adjusted their feed mix. Market participants indicated that imported copper concentrate consumption could fall by 10% to 40% in 2026 compared with 2025, as operators substitute with domestic concentrate, copper anodes and other alternative raw materials.

Demand for pyrites and gold concentrate has increased, supported by higher sulfuric acid prices. Gold payables for pyrites have risen above 100% in 2026 after accounting for the 13% import tax, further incentivizing their use. However, these substitutions remained insufficient compared with demand and have only partially alleviated concentrate tightness.

Smelters also reported declining copper grades in available imported concentrate, resulting in lower overall copper content in furnace feed.

Traders were observed offering both standard clean and non-standard concentrate in bundles to improve overall commercial terms.

Spot market activity for copper concentrate eased in Q2 compared with the previous quarter, mainly due to less spot availability to the Chinese market and more plant maintenance in June.

Platts observed 1.7 million mt of copper concentrate procured by smelters in Q2 2026, down 21% from Q1 2026.

Antofagasta and Chinese smelters fell back to index pricing for mid-year term contracts on July 1, which is the first time in history.

Sulfuric acid dynamics increasingly influence TC/RC trends

Sulfuric acid prices remained a key driver of smelter economics and TC/RC dynamics over Q2. Elevated acid prices, particularly in ex-China markets, continued to support smelting margins and encouraged restocking activity despite low benchmark charges.

China's sulfuric acid export restrictions raised concerns among some South American producers that rely partly on the Chinese acid supply. At the same time, ex-China smelters were observed swapping sulfuric acid for copper concentrate, further tightening the supply available to Chinese buyers.

China's sulfuric acid prices lagged international levels due to domestic pricing constraints, making overseas buyers more competitive in sourcing material.

Platts assessed sulfuric acid CIF India at $420/mt on July 1, up from $200/mt on April 1, which is significantly higher than China's domestic price at Yuan 1,800-2,000/mt ($265-$295/mt).

China's copper concentrate imports fell 1.7% year over year to 2.36 million mt in May, while Chile's exports totaled 1.21 million mt, with shipments to ex-China markets rising 33.5% year over year, according to customs data.

Separately, Japan's Mitsubishi Materials and JX Advanced Metals announced plans on May 28 to integrate their copper concentrate procurement operations, highlighting intensifying competition for raw materials.

Cathode liquidity expected to stay tight in Q3

Tightness in concentrate supply and smelter margins are also expected to weigh on refined copper availability in Asia in the third quarter of 2026.

Production cuts at some ex-Asia smelters, arbitrage flows to the US, and disruptions to sulfuric acid supply affecting solvent extraction-electrowinning operations in the Democratic Republic of Congo are likely to limit spot cathode offers into Asia, multiple traders said.

Market participants are also awaiting clarity on potential US import tariffs on refined copper.

China's refined copper imports fell 9.8% year over year to 1.54 million mt over January-May 2026, according to China Customs data.

At the same time, China's tightening tax compliance regulations targeting the "invoice-driven economy" have restricted spot trading activity for copper cathodes and scrap since late April, amid insufficient invoice quotas.

Lower copper prices supported downstream buying in June, and China's copper demand is expected to grow by 452,500 mt in 2026, driven by stronger wire rod orders, electric vehicle demand and grid investment, according to Wang Ruilin, associate director at S&P Global Energy CERA. This is expected to be partially offset by weaker air-conditioner output and a slowdown in the solar sector.

Copper cathode import premiums into China are expected to remain range-bound in Q3, as elevated prices continue to weigh on demand while supply remains constrained.

Platts assessed the CIF China copper cathode import premium at $90/mt over London Metal Exchange cash on July 9.