Copper concentrate treatment and refining charges (TC/RC) remain compressed at $8-12 per tonne and 0.8-1.2 cents per pound, down more than 70% from the 2024 average of $35-45/t. The squeeze reflects a structural imbalance: global smelting capacity is expanding faster than mine supply, forcing smelters to compete for limited concentrate units.

New smelting capacity in China — including the 400,000t/year Dongying Fangyuan expansion and the 350,000t/year Tongling nonferrous project — has added roughly 1.2 million tonnes of annual capacity in 2025-2026. Global mine supply, meanwhile, grew only 1.8% in 2025 and is projected at 2.1% in 2026, according to the International Copper Study Group (ICSG).

Several mine supply constraints are at play. First Quantum's Cobre Panama remains closed. Anglo American reduced 2026 guidance at Los Bronces by 15% due to ore grade decline. Freeport-McMoRan's Grasberg faces lower grades in the transition to underground mining. These supply losses total an estimated 400,000-500,000t of annual copper in concentrate.

Chinese smelters are responding with maintenance shutdowns and output cuts. Jiangxi Copper scheduled a 30-day maintenance at its Guixi smelter for July, reducing refined output by roughly 45,000t. Yunnan Copper followed with a 20-day maintenance in August. Combined, these cuts could remove 80,000-100,000t of Chinese refined production in Q3.

The TC compression creates a medium-term bullish signal for refined copper prices. When TCs stay below $15/t for three consecutive months, refined output typically begins to contract within one to two quarters. The current TC cycle has been below $15/t since March 2026.

What this means for buyers

Depressed TCs are the single most important leading indicator for copper buyers right now. If TCs stay below $15/t through August, expect Chinese smelter cuts of 80,000-100,000t in Q3, which will tighten refined availability into Q4. Secure Q4 delivery volumes by July. Spot purchases for H2 delivery should be hedged at current LME levels ($13,200-13,500/mt) — waiting for lower prices carries supply risk.