Copper Hits Record Highs While Smelters Lose Money on Every Ton

Global copper benchmarks have surged to new highs even as smelters — the processors that convert mine concentrate into refined metal — are losing money on each ton they handle. Three-month copper on the London Metal Exchange reached $14,779 a ton before easing to about $14,630, and US COMEX copper trades near $6.75 a pound. Yet the 2026 benchmark treatment and refining charge, the fee miners pay smelters, has fallen to zero, down from $21.25 in 2025 and $80 in 2024, while spot rates plunged to roughly negative $127 a ton by midyear.

The disconnect stems from a shortage of mine concentrate rather than a lack of processing capacity. China now refines roughly half of the world’s copper and has accounted for more than 90% of global smelting-capacity growth since 2005, but mine output has lagged expectations. Chile recorded its weakest second-quarter output in at least 19 years, Antofagasta’s first-half production dropped 9.5%, and major operations such as Congo’s Kamoa-Kakula and Indonesia’s Freeport have faced disruptions; Panama’s Cobre Panama remains shut amid a legal dispute.

Despite weak concentrate supplies, new smelting projects continue to be developed as countries treat refining as a strategic asset. Indonesia has attracted more than $9 billion in copper-smelter investment recently, and proposals on the table could add over 8 million tons of smelting capacity by the early 2040s, mostly in Asia. More refining capacity hunting a limited and slow-growing pool of concentrate helps explain persistently negative treatment charges.

Trade distortions are amplifying the squeeze. Expectations of a potential US tariff on refined copper have drawn metal into the United States ahead of any policy move, lifting COMEX inventories to a record near 700,000 tons while LME and Shanghai warehouses together hold barely 300,000 tons. Against a backdrop of rising demand from data centers, electric-vehicle production and grid buildouts, analysts increasingly view the shortfall as structural rather than cyclical — a supply gap that begins at the mine and cascades through smelting, refining and trade flows.

The upshot is that record prices are a symptom: processing margins are compressed or negative almost everywhere, and economic value is concentrating with owners of ore and concentrate. That shift alters where profits sit in the copper value chain and how participants — from miners to refiners and national policymakers — strategize around supply security and investment.