Op-Ed: Acid is becoming copper’s new price signal

The copper industry is focused on the wrong number. While miners and smelters obsess over treatment charges and concentrate shortages, sulphuric acid is emerging as one of the most important variables in the copper value chain.

Reports that Chinese copper smelters are buying more pyrite, commonly known as fool’s gold, should not be dismissed as a niche development. They may be the clearest sign yet that sulphur is becoming an increasingly valuable component of copper concentrates. When treatment and refining charges fall to zero or turn negative, and acid prices remain elevated, sulphur stops being merely a byproduct and starts becoming a source of profit.

In our view, this shift has important implications for miners, smelters, traders and investors alike.

The traditional concentrate pricing model is built around copper payables, treatment charges, refining charges and penalties. That framework assumes copper is the primary source of value and everything else is secondary. Yet a copper concentrate is not simply a package of contained copper. It also contains sulphur, precious metals, iron, impurities, moisture, freight exposure and operational risk. The industry has historically paid little attention to the sulphur component because its value was relatively modest. That assumption is beginning to break down.

The recent behaviour of Chinese smelters suggests as much. Reuters reported that at least six Chinese copper smelters increased pyrite purchases this year. China’s imports of unroasted pyrite reached nearly 392,000 tonnes in the first four months of 2026, the highest level for that period since 2014. The tonnage remains small compared with China’s almost 10 million tonnes of copper concentrate imports during the same period. But the absolute volume is less important than the direction of travel.

The reason is simple. Sulphur can be converted into sulphuric acid, and sulphuric acid has become valuable enough to influence smelter economics.

A dry tonne of feed containing 30% sulphide sulphur can theoretically generate roughly 0.87 tonnes of sulphuric acid, assuming high sulphur capture rates and saleable product. At current acid margins, that can represent meaningful revenue per tonne of feed. In an environment where spot treatment charges have been quoted deeply negative, that revenue matters.

That does not mean every high-sulphur concentrate suddenly becomes attractive. Far from it.

Pyrite brings iron as well as sulphur. Higher iron content can increase slag volumes, oxygen requirements, copper losses and maintenance costs. Higher sulphur can strain gas-handling systems and acid plants. Some smelters have the capacity to absorb those challenges. Others do not. The winners will not necessarily be the smelters buying the most pyrite. They will be the operators that understand their bottlenecks and know exactly where additional sulphur creates value instead of destroying it.

This distinction is often lost in public discussion.

Many observers see rising pyrite imports and conclude that Chinese smelters have discovered a new profit centre. The reality is more nuanced. The economics are highly plant-specific and depend on acid storage, acid demand, logistics, impurity tolerance and available processing capacity. A headline acid price tells only part of the story.

What matters is the net margin generated after accounting for freight, conversion costs, storage, slag management, operating risks and capacity constraints.

Even so, the broader signal is difficult to ignore.

Reuters reported that Chinese sulphuric acid prices have increased roughly fivefold over the past two and a half years and generated an estimated US$1.5 billion boost to Chinese copper smelters in 2025. While some analysts expect prices to retreat, the episode demonstrates how a byproduct can become a major driver of profitability during periods of concentrate scarcity.

The implications for concentrate sellers are potentially significant.

For years, sulphur has largely been viewed as a penalty risk. Today, miners with clean, high-sulphur concentrates should be asking who captures the resulting acid value. If smelters are monetizing sulphur while treatment charges remain under pressure, concentrate contracts may need to evolve to reflect that reality. We may eventually see acid-linked pricing mechanisms, sulphur premiums or even acid-tolling arrangements emerge alongside traditional concentrate contracts.

That evolution is unlikely to happen overnight. But the conversation has already started.

The geopolitical implications are equally important. China sits at the centre of the world’s largest smelting system and possesses substantial acid production capacity. Chile, by contrast, depends heavily on sulphuric acid for copper leaching. Reuters reported that Chinese acid shipments to Chile fell to zero in March after significant exports a year earlier. The episode highlighted how acid availability can influence copper production far beyond the smelter gate.

Other major copper-producing regions face similar vulnerabilities. As acid markets tighten, sulphur becomes more than a processing issue. It becomes a strategic input.

Investors should also pay attention.

Most valuation models treat sulphuric acid credits as secondary factors compared with treatment charges, refining charges and metal recoveries. We believe that approach increasingly understates risk and opportunity. Acid revenues can cushion smelter margins during concentrate shortages, but they can also disappear rapidly if supply normalizes or demand weakens.

The market’s biggest mistake may be assuming this is simply a pyrite story.

It is not.

Pyrite imports remain small relative to concentrate imports and may ultimately prove to be a temporary arbitrage. The more important development is that sulphur itself is acquiring a measurable market value inside copper smelting economics. Once markets begin assigning a shadow price to sulphur, contract negotiations, concentrate valuations and investment decisions inevitably change.

Whether that change proves temporary or structural remains to be seen.

But one thing is already clear. Copper has long been priced as a metal. Increasingly, it is being priced as a package of metals, sulphur and industrial chemicals. Investors and operators who continue to treat sulphuric acid as a mere byproduct risk missing one of the most important developments unfolding in the copper market today.

* Juan Ignacio Guzmán is the CEO of GEM Mining Consulting