Copper Prices Approach Record High as Chinese Smelters Ramp Up Activity

Global copper prices are moving closer to record highs, supported by a sharp rebound in smelting activity — particularly in China — and tightening dynamics across the concentrate market.

Copper ended the week more than 5% higher, reaching a 10-week peak of $6.11 per pound ($13,480 per tonne) on New York futures. This places the metal within reach of its all-time high recorded earlier this year, before geopolitical disruptions linked to the Iran conflict.

Chinese smelting activity drives market momentum

Recent satellite data from Earth-i shows a clear recovery in global smelting activity after a weak start to the year. In March, inactive global smelting capacity fell to 11.7%, down from 14.3% in January, signalling improving operational conditions.

The recovery has been led by China, where inactive capacity dropped to just 3.9%. Combined with ongoing expansion in smelting infrastructure, this pushed active capacity on the mainland to a record 10.73 million tonnes — significantly above both last year’s levels and the three-year average.

This surge reflects a rebound in downstream demand following a slowdown earlier in the year, when elevated copper prices triggered a temporary pullback in buying activity.

Global supply remains uneven

Outside China, smelting performance remains mixed. Africa’s central copper belt has shown relatively strong operational output, while other regions continue to face disruptions.

In Iran, key smelting facilities remain offline, while maintenance outages in Australia have also contributed to reduced activity across Asia and Oceania. In the Americas, smelting capacity utilisation remains particularly weak, with North America recording the highest levels of inactive capacity globally.

Tightening concentrate market adds pressure

At the same time, tightening conditions in the copper concentrate market are adding further upward pressure on prices.

Chinese smelters have increased purchases of concentrate, supported by rising sulfuric acid prices — a key by-product of copper processing. Prices for sulfuric acid in China have surged significantly since the start of the year, improving short-term margins for smelters.

However, this has intensified pressure on treatment and refining charges (TC/RCs), which have fallen into negative territory. Recent spot market deals have dropped sharply compared to positive levels seen in 2024, highlighting the imbalance between smelting capacity and available concentrate supply.

Supply constraints point to continued volatility

Additional supply-side constraints are expected to persist in the near term. Indonesia’s Batu Hijau mine faces an export permit deadline, while new smelting capacity in the Democratic Republic of Congo is set to absorb more locally produced concentrate, reducing volumes available for export.

These developments are tightening global supply chains and reinforcing bullish sentiment in the copper market.

Outlook: strong demand meets structural constraints

Copper’s price trajectory reflects a broader shift in global markets, where demand linked to energy transition technologies, electrification and infrastructure development continues to rise.

At the same time, supply-side limitations — including geopolitical risks, processing bottlenecks and shifting trade flows — are creating a more constrained and volatile market environment.

For Africa, particularly copper-producing regions such as the Democratic Republic of Congo and Zambia, these dynamics present both an opportunity to benefit from higher prices and a challenge in managing supply chain constraints and downstream capacity.