Chinese Copper Concentrate: Processing Fees For Smelters Have Dropped

The copper concentrate processing and refining fee (TC/RC) in China declined last week. This followed a decision by a major mining company to lower its production guidance for 2026. The Agence France-Presse (Afp) weekly purchase index for smelters dropped from -42.80 US dollars/ton and -4.28 cents/pound on November 28 to -43.00 US dollars/ton and -4.30 cents/pound on December 5. The trader purchase index rose from -101.40 US dollars/ton and -10.14 cents/pound to -100.70 US dollars/ton and -10.07 cents/pound due to the narrowing gap between smelter and trader purchase processing fees. The Afp weekly copper concentrate TC/RC average index rose from -72.10 US dollars/ton and -7.21 cents/pound on November 28 to -71.85 US dollars/ton and -7.185 cents/pound on December 5. A batch of Los Pelambres concentrate was purchased by the smelter at a processing fee of -45 US dollars/ton, with a delivery period of December to January. Some market participants believe that the decline in processing fees is due to Glencore, a global metal producer, lowering its 2026 copper production guidance to 810,000 to 870,000 tons on December 3, compared to 930,000 tons in February. It is reported that another batch of mixed ore was sold at a processing fee of -40 US dollars/ton, with a delivery period of January. According to market participants, members of the China Copper Raw Materials Joint Negotiation Group (CSPT) plan to reduce at least 10% of the crude copper production capacity utilization in 2026 to cope with the situation where copper concentrate processing and refining fees (TC/RCs) remain below a reasonable level. However, some opinions suggest that the production cut plan is a strategic move by smelters to enhance their bargaining power in annual benchmark negotiations. The 2026 benchmark copper concentrate (BM) processing fee negotiations between Antofagasta and Chinese smelters are still progressing slowly. Some traders believe that the later the BM processing fee is determined, the more likely the spot processing fee will further decline in the short term, as non-CSPT group smelters may face greater raw material procurement pressure next year because the BM processing fee is a key reference standard for them.