Global Copper Smelting Hits Decade Low: Impact on Prices and Supply Chains

Copper Smelting Activity Declines Globally

Global copper smelting activity fell sharply in January, marking the lowest level recorded in nearly a decade. Satellite data from Earth-i’s SAVANT Global Copper Smelting Index shows 14.3% of smelting capacity remained inactive. This inactivity rate is 6.8% above the three-year average, signaling significant supply-side stress.

The slowdown is not uniform. China, responsible for 45% of global capacity, reported just 7.5% inactive tonnage. Meanwhile, regions outside China, including Asia, Oceania, South America, and Europe, recorded a combined decline of over 1.2 million tonnes. Africa faced the sharpest monthly drop, with inactive capacity rising 12.9% to 28.4%, though the ramp-up at the Kamoa-Kakula smelter in the DRC offers some recovery potential.

Copper Prices Under Pressure Amid Smelting Slowdown

Copper prices for March delivery fell over 3% to $5.78 per pound ($12,740 per tonne), down 12% from recent highs. The decline coincides with a historic collapse in treatment and refining charges (TCRCs), forcing smelters to operate at minimal or negative margins. Spot TCRCs have fallen near –$45 per tonne, while benchmark contracts, such as Antofagasta’s 2026 agreement with China, settled at zero.

Mine disruptions in Indonesia and South America, including closures at Grasberg and Salvador (Potrerillos), tightened concentrate supply. Smelters outside China, which lack government backing, curtailed output as a result. In contrast, Chinese facilities maintained operations, demonstrating structural resilience in global copper processing.

SuperMetalPrice Commentary:

The decade-low smelting activity underscores ongoing supply chain vulnerabilities in the copper market. Prices may remain volatile as miners and smelters balance concentrate shortages with negative processing margins. Investors should watch regional disruptions and TCRC trends closely, as China’s government-backed smelters provide a stabilizing buffer while global markets adjust.