Freeport-McMoRan reported lower mill throughput at its Grasberg operation in Indonesia for May, citing planned maintenance and ore blending challenges. Grasberg is one of the world's largest copper-gold mines, producing over 700,000 metric tons of copper annually. Any sustained reduction there has outsized impact on global concentrate flows.
In Peru, copper output fell roughly 8% year-on-year in the first five months of 2026, according to Ministry of Energy and Mines data. Production at Las Bambas was affected by community road blockades in April, while Antamina processed lower-grade ore. Peru is the world's second-largest copper producer, and its supply disruptions compound the global concentrate deficit.
The concentrate market is the tightest it has been since the 2021-2022 squeeze. Spot treatment charges hit $3-5/t in recent weeks, down from $15-20/t at the start of the year. Smelters in China, which account for over half of global refined production, are operating on thin margins and are increasingly reliant on scrap as alternative feed.
On the demand side, Chinese refined copper imports rose 6% year-on-year in May, reaching 287,000t, as grid infrastructure investment and EV production drove consumption. The State Grid Corporation has accelerated its 2026 procurement schedule, ordering 15% more copper cable than the same period last year.
The concentrate shortage is structural, not cyclical. Buyers should expect LME premiums to remain elevated through Q3. Hedge physical positions through LME futures or swaps rather than relying on fixed-price annual contracts, which carry increasing counterparty risk as smelters face margin pressure.