Copper's supply problem is no longer limited to mine disruptions. The next bottleneck is smelting. JP Morgan estimates that roughly 15% of global copper production is affected by sulfuric-acid shortages, while treatment and refining charges have compressed toward zero or negative territory.
The smelter squeeze follows major mine disruptions at Grasberg in Indonesia and Kamoa-Kakula in the DRC. Those disruptions reduce concentrate availability just as Chinese smelters face higher processing costs and weaker margins. CSPT members have signaled output cuts of more than 10% in 2026.
The refined market may stay balanced for a few months because visible inventories still exist. The risk is timing. If smelters cut intake now, refined copper availability can tighten 3-6 months later. That lag matters for procurement contracts that renew before the physical shortage is visible.
Use smelter utilization and TC/RCs as leading indicators. If Chinese smelter utilization falls below 82%, increase coverage before refined copper premiums rise.