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American Focus > Blog > Economy > China’s copper smelters win better-than-expected $0 processing fee from Antofagasta, sources say
Economy

China’s copper smelters win better-than-expected $0 processing fee from Antofagasta, sources say

Last updated: June 28, 2025 12:45 am
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Chinese Smelters Agree to Process Copper from Antofagasta for Free

By Lewis Jackson, Amy Lv and Hongmei Li

BEIJING/SINGAPORE (Reuters) -Some Chinese smelters have agreed to process copper from Chilean miner Antofagasta for no charge, a record low for the industry, but the outcome was better than expected for the smelters, already suffering losses.

Antofagasta has agreed to set copper concentrate processing fees at $0 per metric ton and 0 cents per pound, four sources with the knowledge of the matter told Reuters on Friday.

The agreement reflects a shortage of copper concentrate supply for the smelters that produce the metal increasingly in demand in the transition to clean energy, including for electric vehicles and power lines.

The fees agreed with Antofagasta are regarded as a benchmark for the industry and compare with the 2025 annual charges at $21.25 a ton and 2.125 cents per pound agreed between the Chilean company and Chinese smelters.

One smelter and two analysts speaking on condition of anonymity described it as “better than expected”.

Antofagasta did not immediately respond to a Reuters request for comment outside of their office hours.

The zero processing fee is a win for smelters, given spot charges are hovering around the negative $43 mark – implying smelters would have to pay copper miners for processing their concentrate. Typically, miners must pay smelters to convert copper concentrate into metal.

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The concentrate supply shortage has intensified this year due to new smelter capacity coming online in China and slower-than-expected supply growth.

Miner Ivanhoe Mines cut its output guidance after its copper mine in the Democratic Republic of Congo was affected by seismic activity.

Consultancy Benchmark Mineral Intelligence pegged the global supply deficit for copper concentrate at 1.1 million tons in 2025 and 2.6 million tons in 2026, respectively.

The contracts will deepen smelter losses in China, the world’s largest refined copper producer and consumer, as the fees are a key source of revenue. In time the new low could force some smelters to cut production, analysts, smelters and traders said.

That said, Chinese smelters, however, have not yet trimmed output much as revenue from byproducts such as gold, silver and sulfuric acid partially offsets the loss from copper.

Refined copper output in China jumped by 8% year-on-year to a record high of 6.05 million tons from January to May, official data showed, and consultancy Mysteel forecast the total output in 2025 to climb by 12% from the prior year to 13.29 million tons.

(Reporting by Lewis Jackson, Amy Lv in Beijing and Hongmei Li in Singapore; Editing by Jacqueline Wong and Sonali Paul)

TAGGED:AntofagastabetterthanexpectedChinasCopperfeeprocessingsmelterssourceswin
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