Copper price within sight of all-time high as Chinese smelters hit record activity

Copper ended the week up more than 5% reaching a 10-week high at the close on Friday. At $6.11 per pound ($13,480 a tonne) in New York, May futures are back to within shouting distance of the all-time high closing price struck at the end of January, the day before the start of the Iran war. 

The positive trend was underscored by new satellite data showing March smelter activity continuing to improve after hitting the lowest on record since tracking began nearly a decade ago in January this year.

Earth-i’s latest SAVANT Global Copper Smelting Index shows that 11.7% of global smelting capacity was inactive in March, down from 14.3% registered in January. Earth-i’s satellites cover some 95% of global capacity. 

The increased activity was concentrated in China where the country-level inactive capacity sub-index fell by 1.1% to just 3.9%.

London-based Earth-i points out that together with the continuing build out of smelting capacity on the mainland, this resulted in an all-time high active capacity reading of 10.73M tonnes, more than 775k tonnes higher than a year ago and 1.49M tonnes above the 3-year average.

“This speaks to the improvement in downstream activity in recent weeks, as demand recovers following a ‘buyer’s strike’ in response to record high copper prices in January that has also seen imports from international market slump.”

Outside China, with the exception of Africa where the central copper belt showed strong operating performance, activity fell. 

In Iran two smelters with combined capacity of 400ktpa are offline (outside their historical routine maintenance schedules) and the ongoing outage at the 300ktpa Mount Isa smelter in Queensland, Australia helped keep the Asia & Oceania regional inactivity sub index elevated at 18.7%, well above its 3-year average of only 5.7%.

According to Earth-i, inactivity did tick up modestly in Europe by 2.1%, but the region is still showing the lowest average percentage of idled capacity at 6.2%. Meanwhile smelting continues to be weakest in the western hemisphere, with the inactive capacity sub-index for North America rising by 10.3% in March to 32.3%, moving above that of South America at 27.4%.

Acid test

Chinese smelters’ willingness to buy concentrate increased further as sulfuric acid prices surged with FOB China at $210 per tonne in April, up 74% since January due to disruptions from the Iran war, according to a S&P Global Energy report. 

This allows the country’s operators to secure short-term margins while putting additional pressure on TC/RCs (charges paid by miners to refiners). Spot TCRCs have plunged into deeply negative territory, with recent spot market tenders closing near –$78.50 per tonne and –7.85¢ per lb according to Platts, a unit of S&P Global Energy. That’s a swing from a positive +$50 per tonne in January 2024.

The downward pressure on TC/RCs will remain, says S&P Global as the copper concentrate export permit for Indonesia’s Batu Hijau mine is set to expire at the end of April. In addition, the Democratic Republic of Congo’s Kamoa-Kakula 500ktpa capacity smelter began anode production at the end of 2025 which will consume domestically produced copper concentrate, further curbing exports.

The benchmark annual contract market has followed this collapse. Antofagasta’s 2026 benchmark agreement with a Chinese smelter settled at zero dollars, the lowest annual TC/RC terms ever recorded.