For decades, copper miners paid custom smelters between $50 and $100 per dry metric ton to process copper concentrate. In 2025, spot treatment and refining charges (TC/RCs) collapsed deep into negative territory, culminating in Antofagasta and Chinese smelters agreeing on a 2026 annual benchmark near minus $40/t-the first negative benchmark in the history of the copper trade. In effect, smelters now pay miners a premium simply to secure feed for their furnaces. This is not a transient trading anomaly, but the collision of two structural capacity cycles: constrained mine supply versus unconstrained smelting expansions.
On the smelting side, capacity continues to surge: China maintains extensive new facility commissions, Indonesia built domestic smelters under raw mineral export bans, and India's Adani conglomerate inaugurated a massive greenfield complex. On the mining side, primary mine output is structurally constrained, hit by compounding supply shocks through 2025: the mud rush at Grasberg (triggering force majeure and reducing output well into 2027), severe flooding at Kakula in the DRC, the prolonged shutdown of First Quantum's Cobre Panama, and ground stability issues at Codelco's El Teniente. A new smelter is built in 2-3 years; a Tier-1 greenfield copper mine takes over a decade. This fundamental deficit cannot quickly balance.