The copper concentrate market is experiencing its tightest conditions since the Q1 squeeze, with spot treatment charges (TCs) falling to $8.50/dmt this week, down from $10/dmt in late May. Charges below $10/dmt indicate smelters are paying significant penalties to secure feed, reflecting the profound shortage of mined concentrates relative to smelting capacity.
Global refined copper output rose 4.1% year-on-year in the second quarter of 2026, driven by Chinese smelters running near capacity at 92% utilization rates. However, global mine supply grew only 1.8% over the same period, constrained by operational disruptions in Chile, Zambia, and the Democratic Republic of Congo. The resulting concentrate deficit is estimated at 350,000-400,000 tonnes annualized.
Chinese smelters have responded by reducing spot concentrate purchases and drawing down raw material inventories. Jiangxi Copper and Tongling Nonferrous have both announced maintenance shutdowns for late June, partly to align with concentrate availability. The TC floor is expected to test $5-6/dmt if mine supply does not improve by Q3.
On the scrap side, copper scrap availability remains tight globally, with secondary smelters competing for limited supply. Scrap premiums in Europe hit $320/mt over LME cash, reflecting the structural shortage of recycled copper.
The TC collapse signals that refined copper production faces volume risk in H2 2026. Procurement teams should secure term concentrate or cathode supply agreements now rather than relying on spot market availability. The widening concentrate deficit suggests higher LME prices ahead. Consider increasing cathode stockholdings by 2-4 weeks of consumption.