Spot treatment charges for copper concentrate dropped to $8.50 per dry metric tonne this week, extending the slide that began in mid-May. Refining charges fell to 0.85 cents per pound. TC/RC rates are now at levels that make smelting unprofitable for high-cost Chinese and Indian operators.
The concentrate market deficit is structural. Global mine production grew only 1.8% year-on-year in Q1 2026, according to the ICSG, while smelting capacity expanded 4.5%. The gap is being filled by scrap, but scrap availability has tightened since China's import restrictions.
Chinese smelters are the most exposed. The China Nonferrous Metals Industry Association estimates that 12% of Chinese smelting capacity is operating at negative margins at current TC rates. Industry sources report that two smaller smelters in Jiangxi have already cut run rates by 15%.
The TC floor remains unclear. Traders report that no term deals are being signed below $10/dmt, but spot transactions have slipped through that level. The concentrate market typically sees support around $5/dmt, the cash cost floor for most mines, but that level has not been tested since the 2024 squeeze.
Buyers of refined copper should be aware that squeezed smelter margins eventually lead to production cuts, which tighten refined supply. The TC/TC compression is a leading indicator of refined market tightness 2-3 months out. Build inventory coverage now if Q3 delivery volumes are not yet secured.