Copper prices roared to a fresh all‑time high on Monday, with the three‑month London Metal Exchange (LME) contract touching 11,996 in intraday trading, as the market reacted sharply to an unprecedented processing deal between Chilean miner Antofagasta and a major Chinese smelter. The agreement — setting 2026 treatment and refining charges (TC/RCs) at zero — underscores the depth of the global concentrate shortage and the mounting pressure on smelters.
Sources familiar with the negotiations confirmed that Antofagasta agreed to processing fees of $0 per ton and 0 cents per pound, a dramatic collapse from the 2025 benchmark of $21.25 per ton and 2.125 cents per pound. The zero‑fee settlement marks the lowest annual terms ever recorded and reflects a market where miners hold rare leverage amid tightening ore supply.
Spot processing fees have already plunged into negative territory in recent months, forcing smelters to effectively pay more for the privilege of securing concentrate as mine output lags global demand. Analysts say the Antofagasta deal crystallizes a structural imbalance that has been building across the copper supply chain.
China — the world’s largest copper consumer — has been at the center of the squeeze, with smelters facing shrinking margins and intense competition for feedstock. Industry sources described the zero‑fee agreement as “better than expected” for smelters, despite the extraordinary terms, given the severity of the supply crunch.
The record‑setting LME price reflects mounting concerns that the shortage could deepen into 2026, with mine disruptions, declining ore grades, and rising demand from electrification sectors all tightening the market further.
As traders digest the implications of the zero‑fee deal, market watchers warn that volatility is likely to persist — and that copper’s rally may not be over.
Chart by stockbrokers.org.au
